Industry body UCCIL warns against export duty on low-grade iron ore

Industry body UCCIL has warned that an export duty on low-grade iron ore will lead to drop in production, domestic prices, long-term capacity losses and erosion of India's export competitiveness.

The government is planning to impose a 30 per cent export duty on low-grade iron ore from October this year.

The Utkal Chamber of Commerce & Industry Ltd (UCCIL) said in a statement, "The proposed export duty will also result in sectoral destabilisation: a likely decline in production, crashing domestic prices, erosion of India's export competitiveness, and long-term capacity losses. The effect will also be felt in employment, regional economies, and industrial output."  It "urged the Government of Odisha to protect the state's iron ore mining industry given the recent discussions by the central government around the imposition of export duties on low-grade iron ore".

Such a measure will inevitably destroy the sector, cause a collective loss of over Rs 16,200 crore to the exchequer of mining predominant states and endanger livelihoods of over five mining dependents across the states, it said.

The proposed export duty will also result in sectoral destabilisation, a likely decline in production, crashing domestic prices, erosion of India's export competitiveness, and long-term capacity losses, it warned.

"The effect will also be felt in employment, regional economies, and industrial output," it said.

The estimated production of iron ore was about 277.83 million tonnes in 2024-25.

Odisha is one of the major iron ore producing states as it accounts for 55 per cent of the country's iron ore output. Major producers of iron ore in 2024-25 were NMDC Ltd, Odisha Mining Corporation, SAIL, Tata Steel Ltd and and JSW.

In a letter to the Odisha Chief Minister Mohan Charan Majhi, the chamber highlighted that any such move would adversely affect not just state revenues but also the viability of mining operations and the livelihoods of thousands dependent on the sector, particularly in remote and economically vulnerable regions.

According to industry estimates and data models, imposition of the proposed export duties on low-grade iron ore could result in a loss of over Rs 10,000 crore annually to Odisha's exchequer.