The Indian government has started working on the second round of hikes in import duties to check the country's rising current account deficit (CAD), which, inter alia, will include minerals like iron ore, a government source said on Tuesday, October 9.
The source said that the government is considering replacing the present flat rate of import duty of 10 percent on iron ore lumps, fines and concentrates with a graded structure of duty.
The lowest rate of 10 percent will be marginally increased in the case of high grade imported iron ore fines and lumps, which is not mined domestically in sufficient volumes, and will progressively increase for lower grade iron ore fines and lumps as they are adequately available from local mines, the government source stated.
The government is compelled to increase import duty on iron ore to ease pressures on the CAD (the difference in foreign exchange inflow and outflow) as the total value of imports of this key steelmaking raw material was estimated at $655 million during the 2017-18 fiscal year, a rise of 103 percent over the previous fiscal year, he said citing data from the Ministry of Commerce.