New Delhi, Feb 27 (KNN) India is contemplating imposing an export tax on low-grade iron ore following appeals from small steel producers to restrict its overseas sales, as per two sources directly involved in the matter.

China typically receives more than 90 per cent of India's iron ore shipments, making India the world's fourth largest producer of this crucial steel-making ingredient, reported Reuters.

The surge in demand for steel in India, the world's second-largest crude steel maker, has led to increased iron ore consumption within the country.

Small steel producers recently petitioned the Ministry of Steel, urging measures to limit exports and ensure ample local supplies at affordable rates.

The government is currently examining the issue, considering iron ore export data and the demands of small steel producers, as per the sources familiar with the decision-making process.

In May 2022, India had raised the export tax on low-grade iron ore lumps and fines, with iron content below 58 per cent, to 50 per cent from zero.

However, these taxes were scrapped in November 2022 when exports slowed down, and currently, duty-free exports of low-grade iron ore are permitted. India primarily exports low-grade iron ore.

According to government data reviewed by Reuters, Indian iron ore exports reached 32.2 million metric tons in the first nine months of the current fiscal year, beginning in April 2023, valued at USD 2.7 billion, up from 9.5 million tons a year earlier.

India's steel demand is expected to remain robust, with the government anticipating economic growth to outpace the global economy in the next fiscal year.

In 2023, China's iron ore imports hit a record high of about 1.18 billion metric tons, with many shipments of finished steel coming into India.

(KNN Bureau)