India coal long-term outlook H2 2019: US$5 trillion economy target to drive demand

India remains the major driver of thermal and metallurgical coal demand, globally. We expect demand to increase 40% by 2040 from current levels provided reforms continue and economy progresses to realise its full potential. The Indian government, to achieve a US$5 trillion economy by 2025, recently unveiled the National Infrastructure Pipeline, in which total project capital expenditure of US$1.4 trillion has been planned in the infrastructure sector for the next six years (till March 2025). While we do not expect the entire investment plan to materialise, the focus on developing infrastructure will augur well in the coming decades, as it will help support and meet the country’s growing demand In this report, we look at the impact of these investments on the coal demand and how does the economic growth impacts various sectors consuming coal, including steel and cement.