NEW DELHI: Giving the much needed relief to India’s iron ore exporters, the country’s commerce minister Anand Sharma announced that there will be no hike in tax on iron ore exports.
The speculation of more taxes on iron ore exports came following steel minister Virbhadra Singh’s opinion that there is a need to disincentivise exports of iron ore, possibly through a levy. Iron ore constitutes more than 50 per cent of India’s exports to China and there is a strong view that exports to China must move up the value chain from commodities now.
There is a huge surplus of iron ore in India that cannot be drawn down by domestic demand. In any case the Indian steel industry uses largely lumps, not fines, and it is fines which are the largest chunk of exported ore, Sharma said.
A clamp down would affect the many people employed in mining. Sharma, however, echoed the industry’s concerns about the imbalance of trade with China. Assuring industry of support from the government on market access issues, the minister urged Indian firms to look at opportunities in China with the same self-confidence they display in doing business in the West.
On China, the minister was positive about the cooperation between the two governments on all economic matters ranging from WTO to climate change. For Chinese business, though he had a word of advice on the importance of localisation. He said that the government was liberal about giving work visas to technical staff but the Chinese needed to pass even the technical knowhow on to locals. On unskilled labour, the minister repeated the government’s preference for not allowing unskilled Chinese labour free access.
Source : Commodity Online