Mumbai: Exports of iron ore from Orissa’s Paradip port have fallen 13.6% so far in the first quarter to June due to stringent rules imposed by the local government and a four-fold increase in export tax, a port official told Reuters.

The exports were at 2.55 million tonnes in the period compared with 2.95 million tonnes a year ago, Saroj Misro, traffic manager at Paradip Port Trust, said on Tuesday.

“It (fall in exports) was because of the state’s restrictions," he said.

Lower exports from India, the world’s third biggest exporter of the steel-making ingredient, have resulted in a tight supply situation in the global market amid thin buying by China.

Orissa, India’s biggest iron ore producing state, had around 200 iron ore mines, of which more than half have shut operations after the state began a crackdown on illegal mines in July 2009.

“There is hardly any movement from Orissa due to high railway freight, export duty. They is no feasibility in the market, exporters are losing 500-800 rupees ($11-17) per tonne," said Dhruv Goel, managing director of Orissa-based iron ore trader, SteelMint.

“The authorities are lagging in issuing permits due to stricter rules," said Goel.

Exports from Paradip, India’s second-largest iron ore exporting port, dropped 14.2% to 13.84 million tonnes in the fiscal year 2010-11 that ended in March from the year ago.

India has been losing its export market to competing countries such as Australia as exports have turned unviable after a four-fold rise in exports tax on fines to 20%. Indian Railways also levied a “busy season charge" on iron ore freight rates in the quarter.

India sells about half of its annual output of more than 200 million tonnes to top iron ore importer and steel producer China.

It is likely to export 90-95 million tonnes of iron ore in the current fiscal year to March 2012, about the same level as the previous year, as domestic demand rises, an industry official said on Monday.

Karnataka is yet to start shipments after a top court lifted a ban on shipments imposed last year, triggering exporters to seek court intervention on the matter.