There’s been a delay in iron ore pricing for the past two trading days. I will update when it’s resolved. Meanwhile, India‘s economic bumbling continues to benefit Australia:
An inter-ministerial tussle among commerce, mines and steel ministries has led to nixing of a plan to export iron ore, even as the country struggles to find ways to lower the trade deficit and boost dollar inflows to support the Indian currency.
While the commerce ministry maintains that the country has a stock of 100 million tonne of iron ore that the local producers are not able to utilise because of the slowdown, the steel ministry questions the claim.
A senior government official told ET that the commerce ministry has proposed that an impetus should be provided to boost iron ore export to increase forex earnings. The steel ministry, on its part, has even strongly opposed commerce ministry’s drive to lower export duty on iron ore.
India’s iron ore exports have dropped from $4.6 billion in 2011-12 to $1.6 billon in 2012-13, a decline of 64%, because of the ban imposed by court on mining activities in some states, which has further compounded by an export tax of 30%.
India’s exports fell 1.8% in 2012-13 but imports rose 0.44%, yielding a record trade deficit of $191 billion.
Steel ministry, on the other hand, has argued that exporting the raw material at this juncture can jeopardise the goal of 300 MT of steel production by 2025, set by a committee on manufacturing. The commerce ministry says that there is no shortage of iron ore in the country and steps should be taken to boost exports,” the above quoted official said. But the steel ministry does not agree with the view.
The steel ministry’s stand, outlined in a communication between steel secretary DRS Chaudhary and his counterpart in the commerce ministry SR Rao, follows representations by steel companies like JSW andEssar Steel against the proposed move.
“We would request the commerce ministry not to consider lowering the export duty on iron ore as this would result in an increase in domestic iron ore prices making the Indian steel industry less competitive at a time when it is facing a very challenging environment,” DRS Choudhary said in a letter to S R Rao.
