India’s coal import prices were the lowest in nearly six months as PM Modi’s official visit to the country boosts economic growth in Asia, according to a report by a global consultancy.
China’s imports of coal in January, at $10.5bn, were the smallest since December, when it imported $13.3bn, according TOI data.
China has increased its imports of non-ferrous metals since it imposed strict curbs on the use of steel and aluminium in the past few years.
The sharp decline in coal imports since Modi visited China last week has hurt India’s exports to China.
China was India’s biggest trading partner in the month of January, with imports of steel totalling $4.5 billion, followed by aluminium, which was at $2.3 billion.
But the fall in imports was also driven by a sharp fall in coal, which imports in the second quarter dropped 22 per cent to $7.7bn.
China, which accounted for $4 billion of India’s $25 billion coal exports in the first quarter of this year, now imports $4bn less, according a report from the consulting firm McKinsey & Co. Coal imports are still a major part of India, with nearly two-thirds of the country’s exports of coal, mostly from the north and the east, going to China, according the report.
The report says that the Chinese have seen their demand for coal and its associated raw materials go down, which has reduced their capacity to export.
The fall in demand for mining products in China has been a boon for Indian firms looking to export their coal to China because of low prices.
The country imports almost all of its steel from China and the second-biggest copper producer in the world, Kazakhstan.
The McKinsey report says India’s trade surplus with China fell from $13 billion in 2014 to $9.2 billion in 2016.
This was mostly driven by imports of liquefied natural gas (LNG) from China, while imports of cement and steel fell by about 40 per cent.
China imports about a quarter of India.
India’s imports from China were down about 10 per cent last year to $13bn.