India plans to force new steel plants to blend 30% domestic coking coal into their furnaces by 2030, up from a current maximum of 20%, local media reported.

The mandate, aimed at cutting import dependence and boosting self-reliance, could reduce coking coal import costs by a quarter, according to sources familiar with the plan. The country's steel policy envisages 150 million tonnes of new capacity by the end of the decade, lifting crude steel output from 168 million tonnes in FY26 to 300 million tonnes by FY31.

Steelmakers rely on purer imported coal because Indian varieties are high in ash and sulfur, reducing blast furnace efficiency. Washeries can help, but domestic blending has been capped at around 20% due to a lack of technology and capacity. India imports roughly 250 million tonnes of coal annually, of which a quarter is coking coal. In FY25, it bought 57 million tonnes of coking coal for over 1 trillion rupees.

"Higher blending of good-quality domestic coking coal up to 30% is a step in that direction," said an official. The ratio will rise further and apply to existing plants as washed-coal availability improves.

Yet experts cautioned that the policy will affect efficiency and raise production costs, which cheaper domestic coal must offset. "Reduction in import dependence is also welcome from a strategic point of view," notes a former steel ministry chief economist.

Under Mission Coking Coal, raw domestic output is set to reach 140 million tonnes by 2030. Washing capacity, currently only 30 million tonnes, will nearly double to 58 million tonnes. The government is also exploring stamp-charging technology, which compacts coal into dense cakes, to boost blending rates from 10-20% to 30%.

For an industry that imports 60 million tonnes of coking coal out of 80 million tonnes consumed, the shift is as necessary as it is challenging.