Bolor Lkhaajav
Mongolia and India are taking major steps to boost economic activities between Ulaanbaatar and New Delhi. Amid disruptions in Australian coal supplies to India, in tandem with Mongolia’s drive to diversify its export destinations, the two countries are embarking on a new deal that may create a new supply line from Mongolia to India.
In late November, the Mongolian and the Indian governments discussed what could be a major deal for both Ulaanbaatar and New Delhi: exports of coking coal, which is a critical raw material for India’s steel industry. The deal concerns two specific companies, JSW Steel and Steel Authority of India (SAIL), but if it succeeds it will pave the way for more companies to follow.
Currently in progress, the India-Mongolia preliminary pact would involve exporting “coal, copper, and transit of these minerals.” Given Mongolia’s landlocked position, the country’s economy requires strategic connectivity with its neighbors for the use of their trade ports. Mongolia’s exports to third destinations will need to transit through either Russia or China, and those logistics will be reflected in India’s cost-benefit analysis.
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