The Indian government is considering the imposition of export tax on low grade iron ore fines following representations made by small and medium-scale steel mills seeking a ban on iron ore exports from the country, government sources said on Tuesday, February 27.
The sources said that, while the ministry of steel is expected to make a recommendation for imposition of an export tax on low grade fines, the final decision on the levy and on the rate of such an export tax will be taken by the ministry of finance.
India in May 2022 had raised the export tax on low-grade iron ore lumps and fines, with iron content below 58 percent to 50 percent from zero, and had hiked the duties on pellets to 45 percent from zero, as part of efforts to meet rising local demand. But when exports trickled to a halt, the government scrapped these taxes in November 2022 and currently allows duty-free exports of low-grade iron ore or ore with iron content below 58 percent.
Domestic small and medium scale iron and steel producers have sought a ban on exports of iron ore from the country, which have resulted in rising prices of the raw material in the domestic market.
According to the industry, India’s exports of iron ore reached 44 million mt in 2023, a surge of 44 percent over the previous calendar year at a time when domestic demand was also rising, resulting in higher prices for small and medium scale iron and steel mills.
“We have asked the government to ban exports of all forms of iron ore, otherwise China’s steel industry will run and ours will shut. India should be an exporter of steel and not iron ore,” Chhattisgarh Sponge Iron Manufacturers’ Association president Anil Nachrani said.
However, the Federation of Indian Mineral Industries (FIMI), an industry body of mining firms, has written to the federal steel minister asking the government not to curb iron ore exports.