According to local Indian sources, India's steel ministry has proposed to the finance ministry the imposition of a 15 percent export duty on iron ore lumps and fines.
Currently, there is no export duty on iron ore lumps while shipments of iron ore fines are subject to a five percent duty.
In November 2008, the Indian finance ministry scrapped a 15 percent export duty on lumps and lowered the export duty on fines to five percent with a view to tackling the effects of the global economic slowdown.
The steel ministry is of the opinion that iron ore exports should be discouraged, and that ore should be kept for the domestic steel industry. For the fiscal year 2008-09, India's iron ore exports registered a marginal 0.4 percent growth to 104.7 million year on year, backed by a moderate revival in demand from Chinese steel producers.
India's iron ore exports to China are expected to grow sharply this year as Indian ore is likely to continue to enjoy cost competitiveness against supplies of Australian and Brazilian mining companies. Around 80 percent of the country's iron ore exports go to China, while the balance goes to Japan and Korea.
India produces approximately 200 million mt of iron ore every year. Iron ore prices in the international market dropped by 40 percent to $50/mt in early May this year from $85/mt in February.