New Delhi: Despite surging overseas sales to China, India is currently not considering imposing tariffs on exports of low-grade iron ore, according to a source familiar with the matter. This decision comes in response to appeals from small steel producers and stands despite China typically accounting for more than 90% of India’s iron ore exports, solidifying its position as the world’s fourth-largest producer of this crucial steel-making ingredient.
Earlier this year, India’s small and secondary steel producers urged the government to curb escalating iron ore exports, prompting the Ministry of Steel to contemplate imposing export taxes. However, after a thorough examination, the ministry found no compelling evidence to suggest that the rising exports were adversely affecting the country’s steel producers.
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The mining industry in India vehemently opposes restrictions on iron ore exports, arguing that the country primarily ships out low-grade iron ore, which is not extensively utilized domestically. On the other hand, small steel producers emphasize their reliance on low-grade iron ore, crucial for maintaining their relatively narrow profit margins.
According to government data, India’s iron ore exports surged to $3.9 billion during the fiscal year ending in March 2024, marking a staggering 118% increase from the previous year.
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In terms of near-term objectives, the Ministry of Steel aims to promote the adoption of hydrogen-based technologies among steel mills to reduce carbon emissions. This initiative aligns with India’s commitment to achieving net-zero carbon emissions by 2070, as the country is the world’s third-largest emitter of greenhouse gases.
Additionally, the Ministry of Steel has urged the trade ministry to advocate for Indian steel exporters against impending carbon emissions tariffs imposed by Europe. India’s steel exporters are deeply concerned about the European Union’s plan to levy tariffs on imports with high carbon footprints.
On a positive note, India anticipates sustained double-digit growth in steel consumption, driven by rapid economic expansion and the initiation of new infrastructure projects. Steel consumption soared by 13.4% to 136 million metric tons during the fiscal year 2023/24, signaling robust demand in the domestic market.
