Steel Ministry Wants 30% Duty on Iron Ore Exports.

The steel ministry will soon write to the finance ministry demanding to hike export duty on iron ore to 30% from the current 20%, a move to ensure that there is no shortage of the raw material for the domestic steel makers in the long-run.

"A proposal in this regard has been cleared by Steel Minister Beni Prasad Verma. It will now be sent to the finance ministry for its approval and implementation," a source close to the development told PTI.

The proposal has also kept in mind the deteriorating level of country's raw material reserves, the source added.

The government in the Budget had hiked duty on iron ore, both fines and lumps, to 20% in order to discourage exports and encourage value addition.

The hike was not appreciated by the iron ore industry, which had dubbed it as the "death knell" for it on which relies the livelihood of over a million people.

After the duty hike, exports of iron ore has declined by about 22% to 25.2 million tonnes in April-July to the corresponding period last fiscal.

The Federation of the Indian Mineral Industries expects iron ore exports to fall by over 20% to 75 million tonnes in the current fiscal from 98 million tonnes in 2010-11.

The source said most of the exports go to China which does not allow the local industry there to dock the same to protect the interest of Chinese steel makers.

"If that be so, why can't we stop exports of iron ore and prioritise the need of our own steel makers? India should not only increase duty on iron ore, it should put a blanket ban on shipments of the raw material," he said.

India's iron ore production is substantially higher than the domestic need.

Source : mydigitalfc.com