NEW DELHI India's coal imports jumped 20 percent year-on-year in February to 11.6 million tonnes as prices dipped and the rupee strengthened, data from research firm OreTeam showed, indicating that demand remains strong despite a sharp fall in January.
India's reliance on foreign coal has grown over the years as local production has failed to grow in line with demand, making the country the world's third-largest importer of the fuel even as it sits on the fifth-largest reserve.
Imports in the 11 months to end-February rose 15 percent to 143.5 million tonnes, according to OreTeam, which collects data from representatives at ports, mining regions and companies.
The rupee rose 1.5 percent in February, its biggest monthly gain since October, making imports cheaper. The partially convertible currency fell 1.4 percent in January.
"One of the other reasons for the higher import figure in February was an improvement in sentiments on the backdrop of lower coal prices," OreTeam research head Prakash Duvvuri told Reuters.
"Coal from Indonesia has gone cheaper, allowing some importers who were in two minds earlier to pull-in shipments."
Sub-bituminous coal futures in Indonesia, India's biggest supplier with a market share of more than 50 percent, averaged about 3 percent lower at $59.57 per tonne in February month-on-month.
Power generators from India to Southeast Asia and China are building or planning new coal-fired units designed to run on low-rank, sub-bituminous coal from Indonesia. Such coal trades at a discount to bituminous coal from rival supplier Australia.
India's coal-based power generation rose 8 percent to 587.64 billion kilowatt hour during the April-January period from a year earlier, Power Minister Jyotiraditya Scindia said last month.
Though the government does not regularly release data on coal shipments, Scindia said imports by power producers surged 31 percent during the period to 66 million tonnes.
India, Asia's third-largest economy, depends on state-run Coal India (COAL.NS) for about 80 percent of its output, but the company has fallen short of its targets for the past several years due to difficulties in obtaining environmental approvals, lack of railway access and issues such as employee strikes.
Officers of the company started a three-day strike on Thursday demanding settlement of pay-related issues, in a move that could cut some of its 1.5 million tonnes-per-day output.
Chairman S Narsing Rao told Reuters last month the company expected to produce about 475 million tonnes in the fiscal year ending March 31 and raise it by 30 percent next year. It estimates India's coal shortage would hit 350 million tonnes in 2016-17.
(Editing by Muralikumar Anantharaman)