Minister of State for Steel Vishnu Deo Sai has asserted that the India will not impose restrictions on iron ore exports despite sluggish domestic production. Over the past four years, India’s iron ore production has been declining owing to the curbs on illegal mining. In the previous fiscal year, India’s iron ore production stood at 152 million tonnes, dropping India to the No.10 spot from its earlier position as the third-largest iron ore exporter.
However, the minister has cleared that iron ore output is still sufficient to meet the requirements of the domestic steelmakers. Iron ore is the main raw material for steel production. In the previous fiscal, production was 48 MT more than total consumption of 103.73 MT. Exports, however, were just 14.41 million tonnes in FY14 as a duty of 30 percent and high freight rates made Indian ore uncompetitive in global markets. Industry players such as JSW steel among other had requested the government to impose restrictions on iron ore exports.
India is world fourth largest steel maker behind China, Japan and the US with 100 mtpa steel production capacity now, up from 75 mtpa four years ago. India produced 81 million tonnes steel in the previous fiscal year. The performance of steel industry is highly correlated to overall economic growth as steel demand is derived from construction and automobile sectors. Construction sector accounts for around 60 percent of the country's total steel demand, while the automobile industry consumes 15 percent of demand. The steel industry contributes about 2 percent of the country's GDP and employs over six lakh people.
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