New Delhi, Nov 27 (KNN) A letter has been written to Prime Minister Narendra Modi  by HD Kumaraswamy, Karnataka Chief Minister seeking intervention in iron import and increasing the basic customs duty on the mineral. 

In the letter, the Chief Minister said Karnataka was the third largest producer of iron ore, a key raw material used in steel making, and steel producers are importing ore at a time when the country is facing a large trade deficit.

“The status of Karnataka iron ore is unique with the Supreme Court capping the annual production and restricting the sale among end-users only through e-auction,” the letter said.

“This has led to a situation where a huge quantity put up for sale on e-auction platform remains unsold. We see steel companies are importing a huge quantity of iron ore... when the country is facing large trade deficit,” it said.

Kumaraswamy said the import duty on iron ore and pellets is suitably raised.

He mentioned that the steel players are encouraged to go for import rather than utilizing the local ore, as the import duty is very low of 2.5%.

He said, “The State has already lost more than Rs.600 crore during the last financial year and the current year because of import.”

“The unsold stock may lead to closure of mine operations,” the Minister added.