Assocham seeks duty exemption on imported iron ore

With a view to reviving the ailing steel industry and incorporate investments made in the sector, Assocham today sought exemption of iron ore from import duties as in the case of other minerals like coal.

"Import of finished steel products in India from South Korea, Japan and other countries from ASEAN land at high concessional duty rates as compared to normal duty rates from other countries thereby making these steel products cheaper and pushing the sector in peril," Assocham said in a communication to Finance Secretary Arvind Mayaram.
    
Assocham has asked the government to revisit this "inverted" duty rate between finished steel and iron ore which it said is denying an opportunity to the steel sector for value addition apart from risking huge funds invested by various banks and financial institutions. Also read: Global iron ore prices plunge on weak demand: Emkay
    
"Non-availability of iron ore arising out of a tighter regulatory regime and various government impositions to weed out illegalities from iron ore mining sector is further stressing the steel production in India," said Assocham Secretary General D S Rawat in a statement.
    
"Though steel sector has been growing at the stipulated rate, in recent past the growth has received a major jerk because of the recent shortage of iron ore and as a result major investment proposals of leading domestic and global steel industry players have been halted because of non-assurance of committed supply of iron ore," said Rawat.
    
Despite risks like fluctuating FOB prices of iron ore with demand-supply matrix in international arena, some steel industry players are seriously scouting for long term agreements for their plants survival and many have already imported cargo as test shipments and the cost of the imported cargo is exorbitantly high, the industry body said.
    
Assocham said some players are also resorting to acquisition of iron ore mining assets abroad which is throwing them to another basket of risk: host country regulatory risk.