India considers export duty on iron ore amid production concerns

In FY25, India’s iron ore production stood at approximately 290 mt

India is contemplating the introduction of an export duty on iron ore as soon as October 2, following government warnings that domestic production must rise and prices must be halved, or a duty—and potentially even a complete export ban—could be enforced, according to sources familiar with a high-level review meeting.

A review of the meeting minutes and discussions with multiple participants from ministries, industry associations, and steelmakers by The Hindu Business Line revealed that an export duty in the range of 10–20% is already under consideration for low-grade iron ore (with Fe content of 58% or less), a move that has unsettled several industry bodies.

Associations such as FIMI and QMOEA have appealed to Commerce Minister Piyush Goyal and the Principal Secretary to the Prime Minister, urging them to reconsider any duty imposition. Despite India having an environmental clearance (EC) capacity exceeding 200 million tonnes (mt) annually, actual output has remained around half that level, raising concerns as the country seeks to expand steel-making capacity.

Iron Ore Production and Exports

In FY25, India’s iron ore production stood at approximately 290 mt. With roughly 1.65 tonnes of iron ore required to produce one tonne of crude steel, the nation’s crude steel production was around 153 mt, or 53% of the annual assessed requirement. Of this, about 24 mt were exported, leaving an excess stock of 13–15 mt. However, exports for FY25 were slightly lower than FY24 levels, totaling close to 30 mt.

Meeting minutes noted that if production does not improve and export-related issues remain unresolved, an export duty on iron ore could take effect from October 2, 2025, citing remarks by one of the lawmakers presiding over the session.

The Minister also highlighted the need to reduce domestic iron ore prices by half and to boost steel exports, noting that high ore prices were affecting Indian steelmakers’ competitiveness in global markets. India’s steel exports in FY25 were around 5 mt, positioning the country as a net importer of alloy. The Minister reportedly warned that failure to meet production and export targets could result in a complete export ban.

Urgency to Ramp Up Production

Participants in the meeting said the Minister pressed iron ore miners, including public sector undertakings (PSUs) and state governments, to act swiftly. Odisha was specifically criticized for restrictive policies and inefficiencies. State-run miners such as SAIL, NMDC, and OMC were directed to surrender unsold reserves; for example, NMDC’s inability to raise output was noted, with advice to return unsold mines to auction so new bidders could enhance production.