Centre scraps export tax on iron ore and steel
- November 20, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Centre scraps export tax on iron ore and steel
Subject :Economy
In news-
- India scrapped export taxes on low-grade iron ore and on some intermediate steel products beginning 19 nov 2022, after months of complaints from miners and steel makers about loss of foreign sales opportunities.
Tax imposed-
- A notification issued reverses the imposition in May of a 50% tax on exports of iron-ore lumps and fines with less than 58% iron content.
- The government also reversed a May increase in export tax on iron ore concentrates other than roasted iron pyrites. That tax returns to 30% from 50%.
Why the tax was imposed-
- To boost domestic supply of iron ore, a raw ingredient for making steel,
- To hold down inflation.
- India exported less than half as much steel in the seven months to October as it did a year earlier.
Consequences of imposing tax-
- Earlier this month India’s iron ore exports had dropped to “nearly zero” in October and was further expected to decrease due to lower demand from China’s weak economy.
- Indian producers of low-grade ore depend largely on foreign markets, because most major domestic steel producers use high-grade iron ore.
The iron ore is found in following four types:
- Magnetite:
- It is the most important and best kind of iron ore.
- It contains about 72% metallic iron in it. It is found in Karnataka, Andhra Pradesh, Rajasthan, Tamil Nadu, Goa and Kerala.
- Hematite:
- It contains about 60-70 percent metallic iron in it.
- It is red and brown in colour.
- It is found in Odisha, Jharkhand, Chhattisgarh and Andhra Pradesh. In the western section, Karnataka, Maharashtra and Goa have this kind of ore.
- Limonite:
- It contains about 30 to 40 percent metallic iron in it. It is mostly yellow in colour. It is low-grade iron ore.
- Siderite:
- It has more impurities.
- It contains about 48 percent metallic iron content in it.
- It is brown in colour.
- It contains a mixture of iron and carbon. It is low-grade iron ore. It is self-fluxing due to the presence of lime.
Reserves and distribution of iron ore
- About 95% of total reserves of iron ore are found in the States of Odisha, Jharkhand, Chhattisgarh, Karnataka, Goa, Telangana, Andhra Pradesh, and Tamil Nadu.
- India’s leading state that produces iron ore is Odisha. It accounts for more than 55% of the total production followed by Chhattisgarh producing almost 17%, this is followed by Karnataka and Jharkhand producing 14% and 11% respectively.
Export of iron ore from India
- India is the fifth largest exporter of iron ore in the world.
- About 50 to 60 percent of our total iron ore production to countries like Japan, Korea, European countries, and lately to Gulf countries.
- Japan is the biggest buyer of Indian iron ore accounting for about three-fourths of our total exports.
- Major ports handling iron ore export are Vishakhapatnam, Paradip, Marmagao, and Mangalore.