India is unlikely to impose tariffs on exports of low-grade iron ore for now, despite rising overseas sales to China, according to a source with direct knowledge of the matter. This decision comes as a setback for small steel producers who had requested the government to curb the increasing exports.
China typically accounts for more than 90% of India's overall iron ore shipments, making it the world's fourth-largest producer of the steel-making ingredient. The Ministry of Steel was considering an export tax on iron ore after small and secondary steel producers petitioned the government earlier this year to restrict the rising exports.
However, after examining the issue, the Ministry of Steel did not find any evidence to suggest that the increasing iron ore exports have adversely impacted the country's steel producers, said the source, who wished to remain anonymous as the plan is not yet public.
The Ministry of Steel did not respond to a Reuters email requesting comments on the matter.
India's mining industry opposes any curbs on iron ore exports, arguing that the country only ships out low-grade iron ore, which is not widely consumed within the country. On the other hand, small steel producers insist that they use low-grade iron ore, unlike large steel mills, and steady supplies at reasonable prices are crucial for their relatively small profit margins.
During the fiscal year ending March 2024, India's iron ore exports were valued at $3.9 billion, a significant increase of 118% from the previous year, according to government data.
