Miners' body the Federation of Indian Mineral Industries said as a fallout of the duty hike on iron ore exports in the Budget, India's outbound shipment of the key steel making raw material will come down by up to 35%.
Mr Siddharth Rungta president of FIMI told PTI that "Our logistics costs are already high. The rise in export duty will make it more uncompetitive. I sense iron ore exports from the country will dip by 30% to 35% on an annual basis as a result."
Mr Rungta said that the organization would request the government to reconsider its Budgetary proposal by highlighting possible fallouts of the duty hike move soon.
He said that "Because of the hike in export duty, no fresh contracts are signed now. Only earlier contracts are being honored. Though the impact of export duty hike is not being immediately felt, it will be felt within a month."
Mr Rungta said that the hike in export duty would also lead to lower domestic production of the raw material resulting to an increase in price. Though the cost of mining iron ore in India is more or less the same when compared with others in the global arena, handling and transportation cost here is far higher than other global producers.
While the finance minister Mr Pranab Mukherjee justified the move to increase export duty on the pretext of ensuring raw material security, FIMI maintain there would be no dearth of iron ore in the country for at least next 200 years as India has sufficient reserves to feed the domestic plants.
( Source: www.steelguru.com )