As such, ASSOCHAM has suggested the
Government to maintain 30 per cent duty on export of iron ore (lumps
and fines) till the time iron ore shortage situation in India
At a meeting convened by the Commerce Ministry last week (June 5, 2014), ASSOCHAM had also suggested the government to reduce the import duty on iron ore (lumps, fines and pellets) to zero from the currently levied 2.5 per cent. “This shall help rectify this anomaly in the duty structure and safeguard the competitiveness of domestic steel industry.”
The apex chamber had also pitched for halting iron ore exports by state-run National Mineral Development Corporation (NMDC) till the time present scenario normalises.
“Exports of iron ore pellets is not only draining India’s mineral wealth but is also causing significant revenue loss to the country as pellets attract only five per cent export duty whereas it is 30 per cent in case of iron ore exports,” said DS Rawat, ASSOCHAM's Secretary General, D.S. Rawat.
“It is both surprising and unfortunate to note that despite severe iron ore shortage, India exported 14 MT iron ore in the last fiscal, mainly in the form of pellets,” said Rawat. “Besides, value addition in case of pellets is merely 20 per cent as against 500 per cent in case of steel.”
“Therefore, export of steel is a better value proposition for India as it not just adds extra value to the raw material but creates new employment avenues and generates revenue,” he added.
Quashing the recent reports about 120 MT approx. iron ore stocks being available in India in different states, ASSOCHAM termed it as a myth and misrepresentation of facts. “Even the iron ore prices in India have escalated by 20-25 per cent while globally prices have decreased by up to 30 per cent since April 2013.”
Due to unavailability of iron ore, there has been a sharp decline in steel capacity utilization which declined to 77 per cent in FY 2013-14 from 88 per cent in 2010-11, moreover, India imported 5.7 MT steel in FY 2013-14 to fulfill the domestic requirement.
“There is a strict need to conserve this exhaustible natural resource which is available in limited quantity instead of exporting it to achieve the target of 300 MT crude steel capacity by 2025 set by the high level working group,” further noted ASSOCHAM.
ASSOCHAM has also highlighted sluggish performance of domestic steel industry during the course of past 4-5 years due to factors like poor availability of key raw material of iron ore, high raw material prices and delay in statutory clearances.
Besides, India is lagging far behind
the world in terms of per-capita steel consumption which stood at 59
kilograms (kg) in FY 2012 in India as against global average of 217
kg. “This suggests strong headroom for growth for Indian steel
industry, therefore more development work needs to be planned to
boost the steel consumption to reach the level of average global
apparent steel use.”
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