New Delhi: The government on Wednesday said it is not considering reducing export duty on iron ore, rejecting the demand of domestic producers of the mineral.

“The finance minister ( P. Chidambaram) has clearly said that there will no duty reduction on exports of iron ore," commerce secretary S.R. Rao told reporters in New Delhi.

Domestic iron ore producers had demanded a cut in exports duty from the current level of 30%.

The mines ministry was in favour of a reduction in the duty, while the steel ministry was opposed to the idea.

India was once the third-largest exporter of iron ore, the raw material for steel making, but outbound shipments had slumped more than 80% in three years to hit 18 million tonnes in the last financial year.

Exports of iron ore fell from a high of 117.4 million tonnes in 2009-2010 to 18 million tonnes in 2012-2013.

Exports this year could remain well below the record high of more than 117 million tonnes seen in 2009-2010 with a ban on exports from major producing states Karnataka and Goa being in force.

The Supreme Court is hearing an appeal seeking permission to resume mining in Goa, India’s top iron ore exporter that shipped more than 43 million tonnes in 2011-12 before mining and exports were banned in September last year.

On concerns of exporters on reduction in duty drawback rates, Rao said that commerce and industry minister Anand Sharma had discussed the issue with the finance ministry.

“Yes, we have received lot of representations on the duty drawback. This has been registered by my minister. I do believe that he had already have a personal talks with the finance minister on this," he added.

The Engineering Export Promotion Council (EEPC) had termed the government’s decision to reduce duty drawback rates for the engineering sector as a shocking development and has said the move would negate the positive impact of rupee depreciation.

Duty drawback is the refund of duties on imported inputs for export items.

Last month, the government has rationalised the duty drawback and brought more items under the scheme for tax refund to exporters. It has reduced the rates for different engineering items. PTI

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