New Delhi, May 31 (PTI)
Industry chamber Assocham has pitched for adding value to precious minerals like iron ore before shipping them to neighbouring China, which has emerged as the largest export market for primary products like ore.
Stating that about 45% of total exports to China consists of primary products like ore and minerals, the industry chamber said, "(This is) clearly throwing a warning that the country's basic wealth is being shipped to the Chinese manufactures, who are rather aggressive in value addition."
Export of iron ore and minerals alone accounted for about one-third of India's total exports to China in the last fiscal, it said, adding that India must push for shipping manufactured goods to the neighbouring market.
"Export of mineral resources sucks our natural resources leaving little for value-added manufactured products in the country," Assocham said, while pitching for a further hike in export duty on iron ore from the current levels of 30%.
"A conscious effort must be made to decrease share of ores and minerals to China," it added.
However, mining industry differs from Assocham's views as it says that most of the iron ore exports to China are of low grade quality, which can not be kept at mines for long due to their hazardous nature.
Besides, production of iron ore is much more than the demand in the country, while exports have fallen considerably in the last fiscal due to increased duties, said a senior official of a leading mining company.
India produced about 170 million tonnes of iron ore in the last fiscal, according to the provisional figures of the government. Of this, only about 60 million tonnes of the ore was exported in 2011-12.
Assocham also expects that despite a global slowdown, the Chinese importers of ores and minerals would not reduce their offtake "as they would like to build strategic reserves of such critical raw materials".
Moreover, Indian exporters should also explore opportunities in increasing exports in sectors like engineering, chemicals and petroleum, the industry chamber said.
In 2011-12, the engineering goods were the second biggest item of exports to China, followed by petroleum products.
Engineering goods exports accounted for about 22% of India's total shipments to China in FY'12, while petroleum products share was about 13-14 per cent of total exports and chemicals and related product's share was about 7-8%.
According to Assocham, increased exports of these products would help in bridging the huge trade deficit with China, that stood at $3 billion between April, 2011 and January, 2012.