"Despite gradual relaxation in lockdown norms, demand over the second quarter of FY21 shall be further dampened by the onset of the monsoon season. Overall, domestic coal imports are also likely to be lower in Q2 FY21 year-on-year," it said.
According to IndRa, domestic coal imports are likely to have been lower in July 2020 due to the low domestic demand from end-user industries amid the COVID-19 outbreak.
Also, the government has mandated Coal India to replace at least 100 million tonnes (MT) of avoidable imports with domestic coal in 2020-21, to reduce imports.
"The share of imports in the total domestic consumption reduced to 22 per cent in June 2020 from 28 per cent in FY20. While the non-coking coal imports reduced 34 per cent y-o-y, coking coal imports declined 41 per cent y-o-y," it said.
The agency, however, said the commercial coal mining and the associated reforms announced by the government will help in shaping the coal sector towards a more deregulated and competitive scenario in the long run.
"However, resistance by some states over environmental concerns for some mines on offer is likely to stall the auction of such blocks. Furthermore, a global shift towards greener fuels and simultaneous withdrawal from coal-based energy may be a key challenge to participation of industry players," it added.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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