The government has approved a pact between India and Russia on Wednesday regarding coking coal cooperation, a key steel-making raw material for which domestic producers are still reliant on imports from a small number of countries. Imports account for approximately 85% of India's coking coal demand.

India will be able to reduce its reliance on far-flung countries like Australia, South Africa, Canada, and the United States for coking coal as a result of its cooperation with Russia. It will also lower the per-tonne cost of steel production because Russia is closer geographically than the other countries.

According to an official statement, Prime Minister Narendra Modi's Cabinet approved a memorandum of understanding (MoU) on coking coal cooperation between India's Ministry of Steel and Russia's Ministry of Energy.

The MoU's goal is to strengthen India's and Russia's cooperation in the steel sector. The activities of the collaboration are aimed at diversifying the sources of coking coal.

The agreement will benefit the entire steel industry by lowering input costs and steel production costs in the country. According to the statement, it will also provide an institutional mechanism for India and Russia to cooperate in the coking coal sector.

India imports about 56 million tonnes (mt) of coking coal worth around Rs 72,000 crore per year, according to official data. About 45 MT is imported from Australia alone, with the rest coming from South Africa, Canada, and the United States.

Domestic steel producers were previously asked by the steel ministry to obtain coking coal samples from Russia, test the raw material at their plants, and report back on the results.

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