KOLKATA (miningweekly.com) - India’s tendency to flip-flop on its policy stance regarding export duty on iron-ore was repeated on Thursday with the Commerce Ministry announcing that the government would relook pruning the duty, based on fresh data.
Last month the Finance Ministry ruled out any cut in the 30% tax levied on the export of iron-ore from the country.
Officials in the Commerce Ministry said they would once again approach the Finance Ministry with data on iron-ore exports over the past few months and reiterate to it the mining industry’s inability to take advantage of the weak rupee against the dollar to increase export shipments, for no other reason than the stiff 30% tax rendered such shipments uncompetitive against ore exported from mines in Australia.
The Commerce Ministry has argued that with the rupee appreciating to range of Rs 60/61 to a dollar over the past two months, miners’ realisations from exports in rupee terms had fallen. Earlier, when the rupee had depreciated to Rs 68/69 to a dollar, the Finance Ministry had argued that with higher realisations from exports, miners’ earnings were healthy enough to shoulder the burden of the 30% export tax.
However, the Commerce Ministry said that another motivation for reviewing the duty structure was the fact that traders representing Chinese steel mills were exiting the Indian markets, unable to secure required volumes, with the Ministry stating that it would not be in ‘national interest’ if the trend persisted and became permanent over time.
The Commerce Ministry was in the process of compiling export volumes for the August to October period, anticipating a further slide in shipments and would place the new data before the Finance Ministry.
Indian iron-ore exports had fallen from a high of 117.4-million tonnes in 2009/10 to 18-million tonnes in 2012/13 and it was forecast that the figure would not exceed between 10- and 12-million tons in the current fiscal period.