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Steel ministry demands for 30% duty on iron ore exports

19 Sep 2011 Evaluate

In order to ensure uninterrupted supply of iron ore for the domestic steel makers, the steel ministry is expected to approach the finance ministry demanding to increase the export duty on iron ore to 30% from the current 20%. A proposal in this regard has been cleared by Steel Minister Beni Prasad Verma and soon it will be sent to the finance ministry for its approval and implementation.

Earlier, in order to discourage the exports of iron ore, the government in this year’s budget has increased the duty on iron ore, both fines and lumps to 20%. However, the hike was not welcomed by the iron ore industry, and termed it as death knell for the labour intensive industry.

Since the duty hike, country’s exports of iron ore have declined by 21.9% to 25.3 million tonne in the first four month of current financial year to corresponding period last fiscal. And for the month of July 2011, India’s exports of iron ore declined by 22.56% to 3.62 million tonnes from 4.68 million tonnes in the July 2010.

For the current fiscal year, the Federation of the Indian Mineral Industries expects export of iron ore to decline by 20% to 75 from 98 million tonnes in last fiscal year. India mostly exports its iron ore to China, which does not allow the local industry there to dock the same to protect the interest of Chinese steel makers. India’s domestic production of iron ore is significantly above from the domestic demand.

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