30-Oct-2013
The Government may reconsider domestic miners’ demand for a cut in export duty on iron ore with exports of the metal continuing to decline.
The Commerce Ministry plans to compile fresh data for iron ore exports over the last two months and revisit the matter with the Finance Ministry since the advantage of a weak rupee, which exporters enjoyed in the previous months, has been neutralised, a senior official told Business Line.
Last month, the Finance Ministry had turned down a proposal forwarded by the Commerce and Mines Ministries favouring a cut in export duty of 30 per cent on iron ore to boost shipments.
Exports of iron ore have been severely hit over the past two years due to the Supreme Court ordering probes into alleged cases of illegal mining in Karnataka and Goa.
Exports of iron ore fell from a high of 117.4 million tonnes in 2009-10 to 18 million tonnes in 2012-13.
When the Finance Ministry had considered the proposal for export duty cut some months ago, it had argued that there was no need for the move as exporters were already benefiting from a depreciating rupee, the official said.
“Since the rupee had already devalued by about 15 per cent from 58-59 to a dollar when miners’ had forwarded their request to about 68-69 to a dollar when the Finance Ministry considered it, it therefore reasoned that there was no need for a cut in export duty,” the official explained.
Depreciation in the value of the rupee against the dollar helps exporters as their realisation goes up when they convert the dollar payments received into rupees.
Moreover, the Steel Ministry had also lobbied against a reduction in import duty, claiming that it would lead to an increase in raw material prices for domestic steel producers.
However, now that the rupee has appreciated over the last couple of months and is hovering between 61 and 62 to a dollar, the Commerce Department feels that there may be a case again for reduction in export duties on iron ore.
“We are in the process of collecting export data over the last two months to make a fresh case for export duty reduction,” the official said.
India’s iron ore exports have declined 54 per cent to 6.8 million tonnes for the six months (April-September) of the current fiscal. In the corresponding period last fiscal, India exported 14.65 million tonnes.
Source:- thehindubusinessline.com
No comments:
Post a Comment