Govt not considering lowering export duty on iron ore

Export duty was raised to discourage exports of the raw material and conserve them for future use and make sure that the domestic steel industry does not face any shortage

Government is unlikely to consider any proposal for bringing down export duty on iron ore even as the price of the steel-making raw material nosedived to five-year low at around $84 per tonne in the global market.

"We are not considering any proposal to lower export duty on iron ore," a senior government official said.

The price of iron ore has nosedived to five-year low of around $84 per tonne in international markets, creating a big question mark on the viability of exports from India, once the third-largest player in the global iron ore trade.

The basic idea of raising export duty was to discourage exports of the raw material and conserve them for future use and make sure that the domestic steel industry does not face any shortage of the key steel-making input, the official said.

"Nothing has changed in India which could possibly make us believe that there is a need to reduce the duty. The duty was raised not keeping in mind the international price, but with the sole objective to preserve them here," the official added.

Iron ore exports from India have plummeted primarily as a result of exorbitant duty on shipments which currently stands at 30 per cent. The situation has so arrived that miners' body FIMI has apprehended that India might end up as a net importer of the raw material in the current fiscal.

Export of iron ore came down drastically to 14.42 million tonnes in 2013-14 compared to 117.37 million tonnes in 2009-10. Miners often blame duty hike for the dip in shipments.

Export of the raw material fell to 2.25 million tonnes in the first quarter of the current fiscal, from 3.01 million tonnes in the same quarter last year.