ASSOCHAM warned the government against reducing the export duty on iron ore as the industry body feels that such an action would encourage export and deprive the domestic steel firms of the crucial raw material.
The warning from the industry body comes amidst demand from a section of the mining industry to review its earlier decision of imposing 30 per cent export duty on iron ore and differential railway freight for domestic and export sectors.
ASSOCHAM argues that steel firms are facing huge shortage of iron ore and there is a need to prevent excessive export of the raw material.
India has added huge capacity for agglomeration – pelletisation and sintering – in past few years owing to government decision to adopt fiscal measures to conserve iron ore against demand of steel industry to ban iron ore exports.
The industry body warned that the government must stay vigilant and not repeat the experience of illegal mining caused by un-restrained iron ore exports and interests of the steel industry should be receive government’s attention.
In a letter to Steel Secretary DRS Chaudhary, the body referred to the structural deficit of iron ore availability for domestic steel industry owing to an upper cap in iron ore production together with various environmental concerns.
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