India scrapped the export duty levied on low grade iron ore lumps (below 58% iron content), reversing an earlier order from May 2022, when it had raised the duty to 50% in order to control inflation.
In the same notification, the government also removed export tax on certain steel intermediaries from 15% which were also imposed in May. New Delhi also lowered the export tax on iron ore and concentrates other than roasted pyrites to 30% from 50%. Due to higher export taxes, India’s iron ore exports had touched almost zero last month and was further expected to drop due to lower demands from China. Producers of low grade iron ore are highly dependent on overseas markets, as high grade iron ore is consumed by domestic steel producers.
High export tax on intermediate steel products affects shipments adversely. India’s finished steel exports more than halved during the first seven months of the financial year beginning April 2022.
JSW Steel Ltd, India’s largest steelmaker by capacity, stated that it expects its exports to fall over a five-year low in 2022-23 due to reduced global demand and a high export rate.