Steel Ministry mulls removal of customs duty on iron ore

Steel Ministry mulls removal of customs duty on iron ore

Sep 17,2014   10:46 Hrs IST

In the face of rising imports of iron ore from international markets by Steel Industry on account of dwindling domestic supplies, Steel Ministry is now contemplating an option of withdrawing import duty of iron-ore, which would give some relief to steel companies facing raw material crunch. India's iron ore production has come down to an all-time low of 144 million tonnes (MT) in FY14 from the peak level of 218 MT in FY10. The production is expected to drop further to a level of 90-95 MT in current fiscal. On account of paucity of iron-ore in the domestic market, JSW Steel has been importing around 0.5 MT monthly, while Tata Steel, which so far had never had any crunch to run its Jamshedpur plant due to iron ore shortage, may also follow suit after its Noamundi mine in Jharkhand was recently closed by the state. In a related development, in a memorandum to Commerce Minister Nirmala Sitharaman, industry body Assocham too highlighted that drop in domestic iron ore production was forcing steel industry to import iron ore from international markets and suggested government of reducing import duty on iron ore to zero from the current levy of 2.5%. Besides, Miners' body FIMI also estimated of country importing around 15 MT of iron ore in current fiscal and become a net importer with just 8-9 MT exports. Lastly, paucity of iron-ore in the domestic market and consequent imports might tarnish the prospect of many firms also hitting the prospect of having 300 MT capacity by 2025 from around 100 MT presently.