India’s merchant miners have accused the Indian government of creating an ‘artificial’ shortage of iron ore via the imposition of high export duties and freight charges.
The Federation of Indian Mineral Industries (FIMI), India’s leading industry body representing the interests of its merchant miners, levied the accusations against both the state and central governments in a letter to the finance ministry last week.
According to the Economic Times, FIMI claims that a 30% export duty imposed by the government has led to a fall in exports of 42% over the past two years, costing India $8.3 billion in forex. FIMI claims that the export duty is also responsible for a ‘state-induced’ iron ore supply crunch.
Railway freight charges have also surged over the past two years, with a cumulative increase of 126% during the period.
The plea to the government for reforms arrives days after similar complaints from Ficci and Assocham made on behalf of the steel industry. The mines ministry is believed to be ready to reduce the 30% export duty after the decline in exports.
FIMI has also requested a 30% duty on the import of iron to protect the interests of merchant miners, following an increase in the import of iron pellets to 174,319 tonnes in May from 122,331 tonnes in April.
