U.S. Exports of Coal to India Expected to Increase Due to Tariffs from China

What Happened?

Last week China announced a new 15% tariff on coal imported from the United States, after which several shipments of American coal headed for China were diverted to India. 

“Three U.S. cargo ships that were supposed to go to China have landed in India and ten more ships are reportedly waiting." Vasudev Pamnani, director at India's I-Energy Natural Resources, said. 

The new tariffs from China and the response by American exporters could signal a continued rise in U.S. coal shipments to India in 2025. 

Why it Matters

Malcolm Roberts, chief marketing officer at the biggest U.S. coal miner Peabody Energy said last week “more U.S. coal could go to India and more Australian coal to China as a result of the tariffs.” 

The trend of increasing American coal shipments to India has been underway from several years. In 2023, the US exported almost 100 MMst (million short tons) of coal to at least 50 countries, with India being the top destination. 

For countries already shipping coal to India, the increased competition could raise prices and affect domestic coal production. India’s biggest coal suppliers currently are Indonesia, Australia, and Russia. 

India is likely to remain a growth market for coal. According to the most recent data from the Energy Institute’s Statistical Review of World Energy, India now consumes more coal than Europe and North America combined. 

India’s population has surpassed China, and along with its growing population India is also undergoing a rapid increase in industrialization which is fueling the demand for more coal.

There could be geopolitical implications as well, as the move to increase American coal exports to India could increase already growing energy ties between the two nations. While improved energy ties would be good for relations between the U.S. and India, they could increase tensions between Beijing and Washington D.C. 

Closer ties between India and the U.S. could also exacerbate tensions between China and India.

As Tanvi Madon of the Brookings Institute noted “China is India’s largest neighbor; it is also India’s second largest trading partner. But it is also at the same time India’s primary external rival, one with whom India fought a war in 1962.” 

How it Affects You

Data from the U.S. Energy Information Administration indicates that U.S. exports of thermal coal to Asia and Africa surged in the first half of 2024, helping to drive overall U.S. coal exports (thermal and metallurgical) to 53 million short tons (MMst) from 49 MMst in the first half of 2023.

Whether exports alone can significantly strengthen U.S. domestic coal production remains to be seen, but increasing shipments to India offers an opportunity to move in that direction.