India imposes 5% export duty on iron ore pellets
In a bid to safeguard the interests of domestic steelmakers, India governemtn has imposed a 5 per cent duty on exports of iron ore pellets.
Previously, there was not duty on exports of iron ore pellets as exports of iron pellets were negligible. But, the Ministry of Finance on Monday said the drastic rise in exports of iron ore pellets during April-November period of last year caused an apprehension about shortage of the material in the domestic market.
Las month, domestic steel producers had urged the government to impose a tariff on exports of iron ore pellets so that they could get sufficient amounts of the material.
Pratik Jain, partner at KPMG, said India imposed the duty to discourage iron ore exports, but it was not good news for the country's mining or iron ore industry.
Commenting on the move, Mr. Jain said, "They want to discourage iron ore exports in order to make the raw material available to the domestic steel industry. However, it's not good news for the Indian mining or iron ore industry."
The government already charges a 30 per cent tax on exports of iron ore lumps and fines since December 2011. It also introduced many curbs on mining of iron ore in key iron ore-producing states like Goa and Karnataka.
All those steps taken by the government have helped cut iron ore exports from the country by nearly 85 per cent, or around 100 million tonnes, over the past couple of years.