Chief of exporters body hails export duty cut on Goa Iron Ore

Sai Nikesh | The Dollar Business The Government of India is mulling to cut the export duties on low-grade iron ore produced by Goa and this move is expected to boost the shipments to China, the largest iron ore importer for India. According to sources, the Union Minister of Mines and Steel Narendra Singh Tomar on Thursday said, “India is considering implementing a separate duty structure for exports of iron ore from Goa, the country’s top exporting State, and will look at raising import duties to stop dumping of steel.” The Minister was quoted to have said that the Mines Ministry has asked the Finance Ministry to consider a separate export duty structure only for Goa owing to the lesser domestic demand for the State’s low-quality ore. The sources say that most of the Indian steel companies lack technology to use Goa’s iron ore, which has iron content less than 58% and this prompted the Mines Ministry to pitch for separate exports duty structure for Goa. When contacted by The Dollar Business, Sridhar, Executive Director, Goa Mineral Ore Exporters Association, said, “A separate duty structure is very much essential for Goa, as the State’s low-grade ores are nowhere used domestically and the exports only can benefit the sector in the State.” But, the heavy export duties are affecting the sector and at this juncture, duty cuts are very much needed to facilitate the exports, Sridhar added. He also said that the employment and income generation were badly affected as a result of a two-year-long ban on mining in the State. Because of high export duties, an estimate of around 12 million tonnes of low quality iron ore remained halted at various Indian ports, with buyers unwilling to pay high duties. Goa alone has 8 million tonnes of low quality ore waiting at the ports due to lack of buyers, say the sources. The present 30% export duty on iron ore is putting the ore exports at risk with none of the buyers coming forward, citing to this export duties as very high. These high duties have also negatively impacted the global prices on a larger scale, where the global prices have almost halved in the past year. The Mines Minister further said that the government is likely to take a decision on export duty cuts and hike in steel import duties in the upcoming budget.  

This article was published on February 6, 2015.