FIMI seeks 30% duty on iron ore imports

1-Oct-2018

The Federation of Indian Mineral Industries (FIMI) has urged the government to impose 30 per cent import duty on iron ore and iron ore pellets to protect the domestic miners. It also suggested providing incentives to boost exports for reducing the current account deficit.

In a letter addressed to the Secretary, Ministry of Steel, FIMI’s Director (Southern Region) HM Khyum Ali said the government has taken proactive steps through tariff and non-tariff barriers to protect the steel industry from imports while leaving the iron mining sector in a lurch.

Low import duty of 2.5 per cent on iron ore was an incentive for steel plants to bring shiploads of iron ore from other countries even as India is a surplus iron ore producer, he said. Excessive iron ore imports are not only negative on the current account deficit, but also hit public sector enterprise NMDC, the largest producer of iron ore in India. The Karnataka iron ore industry is unique with the Supreme Court capping the production and restricting sale only in domestic market through e-auction. Due to such restriction, the industry is facing a situation where the quantities offered for sale remain unsold while domestic steel companies are resorting to imports, he said. While iron ore produced in Karnataka is not being allowed to be exported, he said other States do so freely even though the current export duty on iron ore is not conducive for tapping the global market.

For the last 15 years, India has always produced iron ore in excess of demand and this is expected to continue with more mines being auctioned. Import of huge quantity of iron ore also impacts the state exchequer due to loss of royalty and other taxes, said the letter.

India has proven iron ore reserves of 28 billion tonnes which is sufficient to produce 300 million tonnes of steel for 50 years.

Source: THE HINDU BUSINESSLINE