India, the world's second-largest producer of crude steel, plans to increase its imports of coking coal from Russia due to dwindling supplies from Australia, the primary source accounting for over half of India's annual imports of approximately 70 million tonnes. The surge in Australian coking coal prices, soaring by 50% to over $350 per metric ton last month, triggered by various factors including maintenance outages and reduced supplies from Queensland, has led India to explore alternative sourcing beyond Australia.

Australian assurances of sustained supply notwithstanding, India aims to diversify its import sources, turning its attention to Russia, despite previous challenges due to stringent economic sanctions imposed on Moscow following the Ukraine conflict. As payment mechanisms between Indian buyers and Russian suppliers become more streamlined, India's steel mills are anticipated to augment their coking coal imports from Russia.

Russian coking coal cargoes are proving to be more cost-effective than Australian supplies, with Russian suppliers reportedly willing to offer competitive prices and accept payments in rupees. Indian government-backed steel manufacturers, including Steel Authority of India (SAIL) and Rashtriya Ispat Nigam Ltd (RINL), have chosen rupee settlement for Russian coking coal, leveraging the currency's advantages. While SAIL expects substantial shipments of Russian coking coal by the quarter ending December, responses from the involved entities to email inquiries seeking comments were unavailable.

Efforts by Russian financial institutions to enhance the conversion of rupees into roubles have facilitated exporters in accessing funds confined within India. The situation emphasizes the rupee's partial convertibility, serving as an enabling factor for Indian companies seeking to diversify coking coal imports and explore Russian sources amid the challenges posed by fluctuating Australian supply and soaring prices.