Ahead of the scheduled Budget next week, a spate of innovative solutions have been put forth to redress the iron ore industry’s biggest woe — export duty on the key input for steel-making.
The latest one comes from the country’s largest private sector miner, Sesa Sterlite, which suggests levying duty in proportion with the prevailing market price.
Company’s vice president A.N. Joshi, talking to PTI, said the government is free to levy higher export duty when global prices are higher. Similarly, it should consider charging less when the price of the input is on the lower side.
“If the price is between $70-80 per tonne, export duty can be five per cent. At the same time, it can go up to even 50 per cent when the price is over $200 per tonne in the overseas market,” Mr. Joshi said.
He claimed this would take care of the government coffer and at the same time rejuvenate India’s iron ore sector which is reeling under severe crisis.
Goa Chief Minister Manohar Parrikar, in a meeting with Steel and Mines Minister Narendra Singh Tomar here yesterday, proposed differential export duty for the key steel-making input taking into consideration that low grade ores (fines) are not used in the country significantly.
Discussing the mining scenario in the state, where the activity was banned for almost 19 months before reopening in April this year, Mr. Parrikar had proposed higher duty for better grades of ore and lower rates for corresponding grades.
Federation of Indian Mineral Industries (FMI) has in a recent presentation proposed that in order to ensure that the resources are utilised, without detriment to domestic steel industry, it is imperative to make Indian exports competitive by withdrawing export duty on iron ore completely.
Government had increased export duty on both fines and lumps to 20 per cent in March 2011 from five per cent and 15 per cent respectively earlier. It raised the duty further for both to 30 per cent with effect from December, 2011.
The rise in export duty coupled with mining ban in major producing states badly impacted shipments by Indian miners. As a result, the country lost its prominence in iron ore export markets and is now regarded as a fringe player. India had exported 117 million tonnes (MT) of iron ore in 2009-10, which fell to 14 MT in 2013-14.