Budget 2020: Fimi pushes for waiver of 15% duty on bauxite exports

Non-plant grade bauxite has limited avenues of usage in India and thus it was mostly exported but the duty on its export hampered business

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2 min read Last Updated : Jan 10 2020 | 6:11 PM IST

In the run up to the Budget for FY21, Federation of Indian Mineral Industries (Fimi) has pitched for exempting 15 per cent duty on bauxite exports from the country.

While large capacity aluminium smelters have been commissioned to utilise metallurgical grade bauxite, non plant grade bauxite has limited avenues of usage. About 84 per cent of the country's bauxite resources are of metallurgical grade used mainly for alumina extraction.

Most of the resources are concentrated in the East Coast Bauxite deposits in Odisha and Andhra Pradesh followed by other states like Madhya Pradesh, Gujarat, Chhattisgarh, Maharashtra and Jharkhand.

By contrast, low grade bauxite ore available largely in Gujarat with alumina content in the range of 38-40 per cent has limited applications. Since availability of non-metallurgical grade bauxite outstrips domestic demand, the ore is largely exported from the coastal regions of Gujarat and Maharashtra.

Exports of low grade bauxite has been raking in substantial foreign exchange for the country besides effective utilisation and conservation of non-plant grade bauxite. But the volume of exports have considerably suffered post the imposition of 15 per cent duty by the government. From 8.91 million tonnes (mt) in 2015-16, exports have witnessed a sharp drop to 1.56 mt in 2018-19. The downtrend in bauxite exports was pronounced during April-September of this fiscal, trickling to 0.36 mt.

“With a view to have optimum utilization of our low grade mineral resources, it is imperative that the duty imposed on export of Bauxite be withdrawn which will lead to reopening of closed bauxite mines, employment restoration besides earning of foreign exchange. This federation therefore requests for complete withdrawal of duty on exports of bauxite”, Fimi said in the pre-Budget memorandum submitted to the Union finance ministry.