The Indian Railway Ministry posted new
freight rates for
iron ore, which will likely cut exports of the raw material.
As a response to the steel industry's demand, the Indian Railway Ministry implemented a dual
freight policy for
iron ore exports. Under this policy, the
freight rate of
iron ore being transferred to ports for export will be twice the
freight rate of
iron ore destined for industrial use.
For instance, a steel producer will pay a tariff of Rupees 25.02 to transport a ton of
iron ore over a 100 km-distance, while an exporter will pay Rupees 50.04 to transport the same amount of
iron ore to a port.
The new policy should ensure
iron ore availability in the domestic market by curbing exports.
Meanwhile, the
freight rate on
stainless steel has been reduced by almost 50%.