New Delhi: Government is believed to have decided to impose 15% export duty on iron ore, used for making steel, which has seen a 50% increase in prices since January, thereby fuelling inflation.
“The decision was taken at the meeting of the Committee of Secretaries (CoS) on 30 May,” a highly placed source said.
The CoS has also decided to roll back export duty on steel, barring primary and semi-finished products, in return for the Rs4,000 per tonne reduction in prices announced by them early last month.
At present, an export duty at a specific rate of Rs300 per tonne is imposed on iron ore with 62% of higher iron content and Rs50 per tonne on lower grade ore. Under the new dispensation, the export duty would be based on the value of the product shipped abroad.
Decisions on both roll back of export duty on steel and imposition of the same on its raw material are expected to announced in the next few days. “The Department of Revenue will notify the decision once the CoS minutes are issued,” an official said.
Steel makers and iron ore producers have been at loggerheads over export of the raw material.
Steel makers have been demanding restrictions on raw material export while iron ore producers, helped by a section in the government, had contended that the ore meant for exports was of no use to Indian steel-makers.
However, the claim was contested by the steel industry. “What is good for China is good for India as well,” Vice Chairman and Managing Director of JSW Steel Sajjan Jindal said.
The domestic prices of steel have seen an increase since 2006-07. Between January and April 2008, price of pig iron went up by more than 70%, construction steel like TMT and wire rods by more than 36% and HR coils by more than 40%.
Rise in raw material prices, strong demand in international and domestic market and increase in global steel prices are some of the reasons cited by the industry for increase in the domestic prices, which have been further impacted by the demand-supply mismatch.