On December 30, the Federation of Indian Mineral Industries (FIMI) stated that it expects India's iron ore exports to decline by about six million metric tons this fiscal year following the recent five percent hike in the export duty on iron ore.
According to FIMI, the industry had set an export target of 110 million metric tons of iron ore for this fiscal year in anticipation of renewed global demand as the world economy recovers. However, FIMI says the target is unlikely to be achieved due to the export duty increase.
As SteelOrbis previously reported, the Indian government recently raised the export duty on iron ore lumps to 10 percent from five percent and upped the export duty on iron ore fines to five percent from zero.
"Our estimate for iron ore exports this fiscal year was 110 million metric tons on the back of the increased demand with the signs of global economic recovery. However, with an additional export duty of five percent on iron ore, exports are set to decline even below the 105 million metric tons achieved in the last fiscal year," said FIMI secretary general R.K. Sharma, according to local press reports.
A FIMI delegation had a meeting today with India's steel minister Virbhadra Singh, during which they requested him to get the government to cancel the duty hike, which will, according to FIMI, adversely affect the mining sector.
"We are the third largest exporter of iron ore in the world after Australia and Brazil. Our domestic production is about 227 million metric tons and we consume only 87 million metric tons. The rest is exported, but now the duty increase will hit the exports," Mr. Sharma concluded.