Increase in the demand for steel in the domestic market coupled with reduction in the iron ore export can help India match China in the production of the metal, steel industry players have said.
The experts stated that the country's iron ore industry is entangled in a debate over iron ore exports.
While the steel industry is lobbying for imposition of export tax on iron ore exports from the country, the exporters are fighting for more leeway in the exports.
Official figures revealed that during 2008-09, the production of iron ore was 227.64 mt while the domestic consumption was only 87 million. Export duty on iron ore fines is five per cent and that on lumps has been increased to 10 per cent from five per cent, experts said.
The iron ore exports from India stood at 53.2 million tonnes between April to October 2009, which is 21 per cent more than the corresponding period of earlier year.
"Close to 50 per cent of the iron ore produced in India is exported," global consultancy firm Ernst & Young said in a report presented during the ongoing Global Steel Conference here.
The exporters body like Goa Mineral Ore exporters association has already expressed their concern over the constant hikes in export duties.
"Any more taxation will adversely affect the business. We are already suffering the impact of earlier hikes," P Sridhar, Director, GMOEA, told PTI.
The experts feel that Indian government is targeting 200 million tonnes of steel productivity by financial year 2020 for which 320 million tonnes of iron ore is needed.
"Iron ore exports will naturally come down and will be diverted to domestic market if there is demand locally," S K Roongta, Chairman, Steel authority of India limited (SAIL) said.
He said that accessibility of a cheap raw material is an added advantage for the Indian steel industry.
"The country will be able to meet its additional iron ore requirement by making investment in beneficiation to improve the quality of the existing ore and also by focussing more on exploration and prospecting to identify resources and boost production significantly," the experts said during the conference.
The Goa conference, which is fifth in the series, rued that India has turned into a net importer of steel due to the inability of domestic supply to meet demand.
"Key issues that plague the steel industry¿s potential in India relate to land acquisition, logistics and coking coal availability," the speakers in the conference said.
If India plans to meet 200 million tones production target by FY20, it needs to take serious steps to resolve the pertinent challenges hampering its growth potential.
"The government needs to promote investments in the Industry, and the investments will flow only when the government provides a favourable regulatory environment in terms of fair and open land acquisition policies, clear forest clearance and relief and rehabilitation policies and quicker requisite approvals and mining leases," the report said.
