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Steel ministry asked to justify demand for ore export duty hike

Indian finance ministry has asked the steel ministry to justify its demand for hiking export duty on iron ore to 30% from the current 20%.

As per report, it has asked the steel ministry to furnish a detailed note highlighting the actual availability position of the mineral and its domestic consumption vis a vis exports to help the government decide on the matter.

In a letter dated November 11, finance secretary Mr RS Gujral wrote to steel secretary Mr PK Misra that before the finance ministry begins examining the demand, the latter should provide a detailed note to substantiate its demand.

In a letter to Mr Gujral on September 19, Mr Misra had conveyed his ministry’s demand for upping the export duty to 30% citing a growing sense of uncertainty among steel producers due to unabated exports of iron ore, which could jeopardize their raw material security. He is understood to have pointed out that unless domestic steel makers were assured raw material security, they would not feel emboldened to expand further. He cited that the country’s likely steel production

The official pointed out that “What we have reasoned is that even if steel production grew by 9%, its likely production would be 152 million tonne by 2019-20 and 234 million tonne by 2024-25, implying a demand of iron ore by 2019-20 and 2024-25 at 243 million tonne and 374 million tonne respectively.”