Assocham, FIMI differ over duty structure on iron ore

Painting divergent picture on iron ore demand-supply scenario, industry association Assocham today suggested scrapping import duty on the key steel-making input while miners' body FIMI proposed withdrawing the levy on ore exports.
The industry groups presented their views at a meeting called by the Commerce Ministry.
Stating that domestic production of iron ore was gradually coming down with the mining ban in major producing states, Assocham said the time was rife to initiate effective steps to ensure adequate supply for domestic steel firms, a source present in the meeting said.
The industry association suggested import duty on iron ore and pellet should be made zero from the present rate of 2.5 per cent for improving the supply of iron ore to domestic iron and steel industry.

It also pitched for halting iron ore exports by state-run NMDC for next 2-3 years till the time present scenario normalises.
The source said Federation Of Indian Mineral Industries (FIMI) said since Indian steel makers do not use much fines and there is a surplus in domestic market of such low-grade ores, exports are the only alternative.

In order to ensure these ores are fully-utilised, it suggested that it is imperative to make exports competitive by withdrawing the present 30 per cent duty completely.
Indian iron ore exports, which mostly constitute fines, plummeted to 14.42 million tonnes from 117.37 million tonnes in 2009-10. FIMI attributed the fall in exports to higher export duty.

The source also said Commerce Ministry heard both the sides, but refrained from taking any immediate decision.
An official each from steel and mines ministries and a representative of Pellet Manufacturers' Association of India were also present at the meeting among others.