As part of its economic stimulus package, the government today cut export duty on iron ore -- to zero on fines and to five per cent on lumps -- a move expected to give the much-needed boost to the industry reeling under the pressure of low demand and fall in prices.
"Export duty on iron ore fines will be eliminated and on iron ore lumps will be reduced to five per cent," the government said in the economic stimulus package.
At present, eight per cent ad-valorem export duty exists on iron ore fines, while that on lumps stands at 15 per cent.
The move is expected to benefit iron ore companies, including Vedanta group firm Sesa Goa, MSPL, among other leading firms, which witnessed a fall in prices of their produce by up to 60 per cent to $50 a tonne at present.
"We are happy that the government has listened to the federation. This move is going to help the industry. However, we will be happier if the duty on lumps is also removed," Federation of Indian Minerals Industries Rahul Baldota said.
Domestic steel manufacturer Ispat Industries welcomed the move saying that the move will let Indian iron ore companies export more of their produce amid waning demand, while JSW steel saw the step against the interest of the industry.
"It is a welcome move. Iron ore demand is shrinking in the domestic market. The industry would now be able to export more of their output. In the long run, if the move hits our interest, we will approach the government," Ispat Industries Vice-Chairman and MD Vinod Mittal said.
However, JSW Group CFO Seshagiri Rao said: "I think, the move will hurt the steel industry as iron ore prices will increase with the changes in the duty structure. It will be interesting to see by what percentage iron ore exports increases with the step amid the waning demand in the global market."
