SME Times News Bureau | 26 Dec, 2009
The government raised the export duty on iron ore fines and lumps by 5 percent each, a decision which the industry said would adversely affect the mining sector.
The government has raised the export duty on iron ore lumps to 10 per cent from 5 per cent and on iron ore fines to 5 per cent from nil, said a finance ministry notification.
"This decision has come at a wrong time when the exports were picking up and showing signs of recovery," Secretary General of the Federation of Indian Minerals Industries (FIMI) R K Sharma was quoted as saying by a news agency on Friday.
He also added that this would have a cascading effect on the steel industry, and the finance ministry should have waited for some time before increasing the export duty and should have allowed the steel industry to recover from the global economic meltdown.
Earlier, the Steel Minister, Mr Virbhadra Singh - arguing that the competitiveness of the Indian steel industry will be seriously jeopardised if iron ore exports continued unabated - had asked the Finance Ministry to impose a 10 percent duty on export of all grades of iron ore.
The latest move by the governemnt is also a bid to encourage domestic production of steel.
India currently is third largest exporter of iron ore in the world after Australia and Brazil. It produced 52-million tons of steel from 2008 to 2009 and plans to increase its steel capacity to 124-million tons by 2011.
