India's Energy Security and Import Dependence (Coal)
Indian Economy
- PYQs8
- Articles1
Background
UPSC examines India's economic policies, energy security strategies, and their impact on the external sector, balance of payments, and industrial growth. The shift from imports to domestic production reflects strategic economic planning and resource management.
India, a major global energy consumer, relies heavily on coal for its power generation. Ensuring energy security involves balancing domestic coal production with import requirements, aiming to reduce dependence on foreign sources and mitigate risks associated with global supply chain disruptions and price volatility.
Facts & tables
- Coal import decline
- India's coal imports declined by 13% (3.14 MT) in April 2026.
- Reduced import dependence
- Overall dependence on imported coal narrowed to 19.7% from 21.7% in the year-ago period.
- Drivers of decline
- Attributed to increased domestic coal production and improved logistics like 'First Mile Connectivity'.
- Sectoral impact
- Power plants' coal imports dipped significantly, especially for those designed to run on imported coal.
| Type | Reference |
|---|---|
| Conceptual area | Indian Economy |
| Body | Role |
|---|---|
| Union Ministry of Coal | Formulates policy and monitors |
| Coal India Limited (CIL) | Implements production |
| Ministry of Railways | Facilitates logistics |
Prelims angle
Prelims angle: Factual recall
Prelims angle: Multi-statement analysis
- India's coal imports declined by 13% in April 2026.
- Overall import dependence on coal narrowed to 19.7%.
- Key drivers: increased domestic coal production and improved logistics.
- 'First Mile Connectivity' is vital for efficient coal evacuation.
- Coordinated efforts by Ministry of Coal, CIL, and Ministry of Railways.
| Year | Framing tags |
|---|---|
| 2026 | Multi-statement analysis, Conceptual understanding |
| 2020 | Multi-statement analysis, Factual recall |
| 2020 | Multi-statement analysis, Factual recall |
| 2019 | Factual recall, Multi-statement analysis |
| 2019 | Factual recall, Conceptual understanding |
| 2017 | Terminology-based question, Conceptual understanding |
| 2016 | Policy measures, Multi-statement analysis |
| 2015 | Factual recall, Conceptual understanding |
Timeline
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Indian Economy
Conceptual area
-
Prelims 2015
Factual recall, Conceptual understanding
-
Prelims 2016
Policy measures, Multi-statement analysis
-
Prelims 2017
Terminology-based question, Conceptual understanding
-
Prelims 2019
Factual recall, Multi-statement analysis
-
Prelims 2019
Factual recall, Conceptual understanding
-
Prelims 2020
Multi-statement analysis, Factual recall
-
Prelims 2020
Multi-statement analysis, Factual recall
-
Prelims 2026
Multi-statement analysis, Conceptual understanding
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Coal imports decline 13% in April
India's efforts to reduce coal imports by boosting domestic production and improving logistics are key to enhancing energy security, strengthening the external sector, and achieving greater self-reliance in energy.
See also
No related topics linked yet.
Past papers
2015–2026 · 8 questions
In the news
Coal imports decline 13% in April
India's efforts to reduce coal imports by boosting domestic production and improving logistics are key to enhancing energy security, strengthening the external sector, and achieving greater self-reliance in energy.
Try these PYQs
Consider the following statements:
1. CoaI sector was nationalized by the Government of India under Indira Gandhi.
2. Now, coal blocks are allocated on a lottery basis.
3. Till recently, India imported coal to meet the shortage of domestic supply, but now India is self- sufficient in coal production.
Which of the statements given above is/arc correct?
Nationalisation: Yes, the coal sector was nationalised by the Indira Gandhi government in phases during the 1970s. Hence, Statement 1 is Correct. Coal block allocation: Coal blocks are not allocated through a lottery system. They are currently allocated through auctions, a shift from the previous system of administrative allocation. Hence, Statement 2 is Incorrect. Coal self-sufficiency: India is not entirely self-sufficient in coal production. While domestic production has increased, there is still a gap that is met through imports. Hence, Statement 3 is Incorrect.
What is/are the purpose/purposes of Government’s ‘Sovereign Gold Bond Scheme’ and 'Gold Monetization Scheme'?
1. To bring the idle gold lying with India households into the economy
2. To promote FDI in the gold and jewellery sector
3. To reduce India’s dependence on gold imports
Select the correct answer using the code given below:
Statement 1 is correct: This is the primary objective of the Gold Monetization Scheme (GMS). The scheme encourages individuals and institutions to deposit their idle physical gold (jewellery, coins, bars) with banks. This gold is then melted, assayed, and added to the country's gold reserves, which can be lent to jewellers, thereby bringing it into the formal economy. Statement 2 is incorrect: These schemes are focused on managing domestic gold supply and demand. They are not designed to attract Foreign Direct Investment (FDI). Policies related to FDI in the jewellery sector are separate from these schemes. Statement 3 is correct: This is a core objective of both schemes.
* The Sovereign Gold Bond (SGB) Scheme provides a financial alternative to buying physical gold. By shifting demand from physical gold to paper gold, it helps reduce the demand for gold imports.
* The Gold Monetization Scheme (GMS) increases the domestic supply of recycled gold available to jewellers, thus reducing their reliance on imported gold. Both schemes aim to curb gold imports, which are a major component of India's import bill and contribute significantly to the Current Account Deficit (CAD).
In what way(s) does the Vizhinjam International Seaport represent a structural shift in India's maritime trade and logistics policy?
1. By functioning exclusively as a domestic cargo hub to reduce reliance on coastal shipping and eliminate the need for foreign collaborations.
2. By focusing primarily on passenger cruise tourism and heritage shipping to increase Kerala's profile as a maritime heritage destination.
3. By leveraging its natural deep draft and strategic location to reduce dependence on foreign trans-shipment ports, enhance revenue retention, and reposition India in regional maritime trade.
Select the answer using the code given below:
Statement 1 is Incorrect: The Vizhinjam International Seaport is designed as an international container transshipment hub, not an exclusively domestic cargo hub. Rather than reducing reliance on coastal shipping, a transshipment hub relies heavily on a "hub-and-spoke" model, where large mother ships offload cargo that is then distributed to other Indian ports via smaller coastal feeder vessels. Furthermore, it actively seeks to attract foreign shipping lines and global integration, rather than eliminating foreign collaborations. Statement 2 is Incorrect: While the port has provisions for a cruise terminal, its primary focus is handling international container transshipment and multi-purpose cargo. It is not primarily focused on passenger cruise tourism or heritage shipping. Statement 3 is Correct: Vizhinjam leverages its natural deep draft of 18 to 24 meters, allowing it to berth Ultra Large Container Ships (ULCS) that previously bypassed Indian ports. Situated just 10 nautical miles from the busy East-West international shipping corridor, it aims to reclaim transshipment cargo historically handled by foreign hubs like Colombo, Singapore, and Jebel Ali. This structural shift reduces dependence on foreign ports, retains an estimated $200 to $400 million annually in transshipment revenues, and repositions India in regional maritime trade. Therefore, option D is the correct answer.
With reference to the international trade of India at present, which of the following statements is/are correct?
1. India’s merchandise exports are less than its merchandise imports.
2. India’s imports of iron and steel, chemicals, fertilisers and machinery have decreased in recent years.
3. India’s exports of services are more than its imports of services.
4. India suffers from an overall trade/current account deficit.
Select the correct answer using the code given below:
Statement 1 is correct. Merchandise trade deficit is the largest component of India's current account deficit. As per RBIs data, India's Merchandise exports during April-August 2019- 2020 were USD 133.14 billion, as compared to USD 210.39 billion of imports during the same period. Statement 2 is incorrect. Commodity-wise composition of imports between 2011-12 and 2018-19 shows that imports of iron and steel, organic chemicals, industrial machinery have registered positive growth rates as % of share in imports. Statement 3 is correct. India's net services (service exports - service imports) have been in surplus. India's Service exports during April-August 2019- 2020 were USD 67.24 billion, as compared to USD 39.25 billion of imports during the same period. Statement 4 is correct. Current Account Deficit (CAD) or trade deficit is the shortfall between exports and imports. As per Economic Survey 2019-20, India's CAD was 2.1% in 2018-19, and 1.5% of GDP in H1 of 2019-20. Therefore, the correct answer is (D) 1, 3 and 4 only. _NOTE: UPSC has not considered this question for marking._
In India the steel production industry requires the import of
India has sufficient reserves of iron ore, a key raw material for steel production. However, it lacks coking coal, a specific type of coal essential for the steel-making process. Saltpetre (option A) and rock phosphate (option B) are not directly used in steel production.
Show 3 more PYQs
Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?
* The country's vegetable oil imports for the first six months of the oil year during November 2018 to April 2019 stood at 75,41,689 tonne, up about 3% from 73,18,295 tonne reported in the same period last year. * Vegetable oils account for the highest import in terms of value in the last five years. India relies on imports for 70 percent of its edible oil consumption.
The term ‘Domestic Content Requirement’ is sometimes seen in the news with reference to -
Domestic Content Requirement (DCR) is a policy tool used by governments to encourage local industries to grow and reduce dependence on imports. In the context of solar power production, DCR mandates that a certain percentage of solar equipment used in the production process must be domestically produced. This policy is aimed at promoting indigenous manufacturing and reducing dependence on imports.
Consider the following statements:
1. The value of Indo-Sri Lanka trade has consistently increased in the last decade.
2. “Textile and textile articles” constitute an important item of trade between India and Bangladesh.
3. In the last five years, Nepal has been the largest trading partner of India in South Asia.
Which of the statements given above is/are correct?
Statement 1 is not correct. Bilateral trade between India and Sri Lanka has increased by around 9 times between 2000-01 and 2018-19. Total trade between the two countries was US$ 6.2 billion in 2018-19, out of which India's exports to Sri Lanka were US$ 4.7 billion and imports were US$ 1.5 billion. Although India has always had a trade surplus with Sri Lanka, the gap has widened since 2008-09. In 2012-13 and 2016-17, the trade slumped, thus disturbing the steady increase in the graph. Statement 2 is correct. According to the World Bank, India exports $2.25 billion worth of textile and clothing products to Bangladesh. In turn, it imports $336 million worth of textile and clothing products from Dhaka. Statement 3 is not correct. Bangladesh is India's biggest trade partner in South Asia. Bilateral trade between India and Bangladesh has grown steadily over the last decade. India's exports to Bangladesh in FY 2018-19 stood at $9.21 billion and imports during the same period were at $1.04 billion.