Notwithstanding the demand from the domestic producers, Commerce Secretary, S. R. Rao on Wednesday said the Finance Ministry has ruled out reduction in export duty on iron ore.
"The Finance Minister, P.Chidambaram has already stated very clearly that there will be no duty reduction of duty on exports of iron ore,’’ he told reporters here.
The domestic iron ore producers have been demanding a cut in exports duty from the current level of 30 per cent. While the Ministry of Steel had opposed the cut in duty, the Ministry of Mines had batted in favour of it. India was once the third-largest exporter of iron ore, the raw material for steel making, but outbound shipments had slumped more than 80 per cent in three years to hit 18 million tonnes in the last financial year.
Exports of iron ore fell from a high of 117.4 million tonnes in 2009-2010 to 18 million tonnes in 2012-2013. Exports this year could remain well below the record high of more than 117 million tonnes seen in 2009-2010 with a ban on exports from major producing states Karnataka and Goa being in force.
On the issue of concerns raised by some sections on the issue of reduction in duty drawback rates, Mr. Rao said that Commerce and Industry Minister Anand Sharma had discussed the issue with the Finance Ministry. " I do believe that my Minister (Anand Sharma) has already had personal talks with the Finance Minister on this,’’ he added.
The Engineering Export Promotion Council (EEPC) had termed the government's decision to reduce duty drawback rates for the engineering sector as a shocking development and said the move would negate the positive impact of rupee depreciation.
Further, Mr. Rao said India’s exports are unlikely to be hit on account of the US shutdown which has been going on for more than a week now. "I do not think so, essentially because of the thumb rule that industry in US is not led by government but by the private sector,’’ the Commerce Secretary said in reply to a question as to whether the US shutdown would reverse export growth of India. "The US businessmen are extremely aggressive. So will they keep quiet if their business have shut,’’ he asked?