Commerce ministry opposes cess

Differences between the steel and commerce ministries over export of iron ore widened further, with the latter vigorously opposing a proposal by the other to levy a cess of Rs 500 per tonne on export of the raw material.

At a high-level meeting here on the issue, the top brass of the Steel Ministry suggested that a policy announcement be made on conservation of iron ore resources in India as the demand for steel would be much greater than envisaged in the National Steel Policy.

It suggested levying a cess of Rs 500 per tonne on ore meant for exports, besides constituting a forum of ore exporters and steel manufacturers to sort out production, sale of iron ore and related pricing issues.

But commerce ministry officials disagreed saying rather than placing quantitative restrictions on iron ore exports, magnetite resources needed to be explored and exploited as was the international practice.

They pointed out that the spot prices for high grade lumps were currently lower than the long term agreement (LTA) prices and commerce ministry's projection was that in the next five years the difference in both the prices would neutralise whereby any quantitative restrictions on exports or tapering of exports would damage India's exports.

The commerce ministry officials argued that since India was a minuscule player in the iron ore export market, pricing remained out of its control and as such any export duty would not be preferred by the ministry.