30% Export Duty on Low-Grade Iron Ore Soon

Move to ensure steady supply to steel units

- SURYA SARATHI RAY

The government may impose a hefty 30% duty on low-grade iron ore exports by October to ensure an uninterrupted supply of the key raw material for steel companies, at lower prices, and promote value-added exports.

The move, according to official sources, is part of a larger plan to support and strengthen the domestic steel industry, enabling it to export 50 million tonnes (MT) of finished steel at a competitive price within a short time frame.

India, the world's second-largest steel-producing country, was a net importer of steel, mainly due to unbridled and cheap imports from China and Japan.

The prohibitive tariff the US imposed on India may not have much impact on the country's steel exports since the US accounts for only 3% of India's total 5 MT kitty last fiscal, a decadal low.

Still, domestic mills are worried about potential predatory dumping of steel in India that touched a 10-year high of 9.5 MT last fiscal.

The government aims to expand and diversify the steel industry's export destinations, rendering the US tariff a non-issue.

Steel making requires two critical raw materials - coking coal and iron ore. India largely depends on imports to meet its coking coal requirement. However, India's sufficient iron ore reserves provide some competitive advantage to the domestic steel makers compared to their peers in China and Japan.

Iron ore prices are on the higher side now. State-run NMDC, the country's largest iron ore producer, raised prices by ₹400 per tonne in August to ₹5,250 a tonne for fines and ₹6,100 a tonne for lumps.