India's iron ore exports could drop by half in the fiscal year beginning in April because of a tax imposed on overseas sales, a senior industry official said on Tuesday.
India slapped an export duty of 300 rupees ($6.7) per tonne on iron ore in the national budget on February 28, after lobbying by steel producers who wanted ore reserves preserved for domestic use.
"Iron ore exports could drop by 50 percent because of the new tax in the budget," Rahul N. Baldota, vice president of the Federation of Indian Mineral Industries, told Reuters. In 2006/07, India's exports are estimated at about 90 million tonnes of iron ore. More than half of the exports are sold to China. Traders and industry officials say the duty is likely to encourage China to seek more Brazilian supplies.
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