New Delhi: India's imposition of an extra 5 percent export tax on iron ore would make overseas sales from the world's third-largest exporter uncompetitive just as demand from China was improving, a trade official on Monday.
Last week, India raised the export tax on iron ore lump variety to 10 percent from 5 percent, and levied a 5 percent tax on iron ore fines.
"Timing of the tax hike is bad. It has come when the exports have started picking up," said Siddhartha Rungta, president of the Federation of Indian Mineral Industries (FIMI), who said it would increase the cost of exports by $3.50 per tonne.
Currently, the average price of Indian ore with 63.5 percent iron content quoted at around $80 per tonne.
Indian iron ore exports more than doubled in October to 9.325 million tonnes from 4.26 million tonnes a year ago, largely due to a pick-up in Chinese demand, data from FIMI showed.
Domestic steel makers, faced with input shortages in coking coal and natural gas, had sought higher export taxes on iron ores to ensure supply as India exported almost half of its ore output.
Bureau Report
First Published: Monday, December 28, 2009, 17:01