Indian steel industry demands hike in export duty on iron ore exports
Indian steel firms are finding it difficult to hold prices and help the government fight inflation, primarily due to the rising prices of raw material which they perceive is primarily due to the rising exports.
They have now officially represented before the Indian government requesting for an increase in the duty rate on iron ore exports from 15% to 35%. According to industry representatives, a higher iron ore export duty would help preserve the country’s natural resources for the benefit of India’s economy. India’s iron reserves are estimated at about 24 billion tonnes. They also claim that this will help attracting foreign investments into the Indian steel industry also. It may be recalled here that the government had revised the duty structure applicable to export of iron ore, in June 2008.
According to the exporters of iron ore, the demand has already fallen due to such increase in duties and Australian mines are making most of the opportunity.
It is interesting to note that during August 2008, China has increased export duty on metallurgical coke (imported by Indian producers of pig iron and some steel firms0
It may be recalled that last year (ending March 2007) India exported about 93 million tonnes of iron ore out of which about 75% went to China. The mining industry says exports to China could halve in the financial year ending March 2009 in part due to the impact of the export tax. But, according to reports, the imports by China have seen a down trend in the recent past due to world wide hike in prices.
Contributed by:
Prof Bikramjit Sen
(Globsyn Business School)
Source: http://www.livemint.com/2008/08/26121903/Steel-firms-push-for-hike-in-i.html?h=A1
Indian steel firms are finding it difficult to hold prices and help the government fight inflation, primarily due to the rising prices of raw material which they perceive is primarily due to the rising exports.
They have now officially represented before the Indian government requesting for an increase in the duty rate on iron ore exports from 15% to 35%. According to industry representatives, a higher iron ore export duty would help preserve the country’s natural resources for the benefit of India’s economy. India’s iron reserves are estimated at about 24 billion tonnes. They also claim that this will help attracting foreign investments into the Indian steel industry also. It may be recalled here that the government had revised the duty structure applicable to export of iron ore, in June 2008.
According to the exporters of iron ore, the demand has already fallen due to such increase in duties and Australian mines are making most of the opportunity.
It is interesting to note that during August 2008, China has increased export duty on metallurgical coke (imported by Indian producers of pig iron and some steel firms0
It may be recalled that last year (ending March 2007) India exported about 93 million tonnes of iron ore out of which about 75% went to China. The mining industry says exports to China could halve in the financial year ending March 2009 in part due to the impact of the export tax. But, according to reports, the imports by China have seen a down trend in the recent past due to world wide hike in prices.
Contributed by:
Prof Bikramjit Sen
(Globsyn Business School)
Source: http://www.livemint.com/2008/08/26121903/Steel-firms-push-for-hike-in-i.html?h=A1
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