Indian Steel Association Urges Government to Impose Export Tax on Low-Grade Iron Ore

New Delhi, Aug 12 (KNN) In a move aimed at addressing domestic shortages and bolstering India's ambitious steel production goals, the Indian Steel Association (ISA) has called for the implementation of export taxes on low-grade iron ore and pellets.

This proposal, detailed in a letter to the federal Ministry of Steel dated July 17, seeks to curb exports and ensure adequate supply for the country's burgeoning steel industry.

The ISA, representing major steel producers such as ArcelorMittal Nippon Steel India and Tata Steel, has recommended a 20 per cent export tax on iron ore with less than 58 per cent iron content and a 10 per cent tax on all iron ore pellets.

This proposal comes as India, the world's fourth-largest iron ore producer, aims to double its steel output to 300 million metric tonnes annually by 2030.

Currently, India does not tax exports of low-grade iron ore but imposes a 30 per cent duty on high-grade ore. This discrepancy has reportedly led some companies to blend higher and lower quality ores for export, potentially exacerbating domestic shortages.

China, the primary destination for Indian iron ore exports, accounts for over 90 per cent of the country's shipments.

The steel industry body projects that iron ore shortages in India could escalate from the current 55 million metric tonnes to over 100 million metric tonnes per year in the near future.

To mitigate this, the ISA is also advocating for expedited iron ore lease auctions and increased production from state-owned entities.

This push for export taxes comes just months after India removed previous duties in November 2022, which included a 50 per cent tax on low-grade iron ore and a 45 per cent duty on pellets.

The steel ministry had earlier this year declined to consider a similar proposal from smaller steel producers, citing insufficient evidence of exports negatively impacting domestic producers.

As India continues to balance its economic growth and infrastructure development with resource management, the government's response to this latest industry appeal will be closely watched by both domestic and international stakeholders in the steel and iron ore markets.

(KNN Bureau)