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India's imports of iron ore and steel are rising amid declining exports, requiring government action to remedy the situation

The Indian government may reduce the export duty on iron ore and semi-finished steel as its increase has adversely affected the country’s overall commodity exports. Hindustan Times writes about it with the reference to the government officials.

According to the publication’s sources, prices and global demand for iron ore and semi-finished products have fallen, and supply exceeds demand.

Officials note, that the decision to reduce the export duty on steel and iron ore products is under consideration. The government constantly reviews duties based on information received from the market.

The latest available data indicate that iron ore exports from India in April-July 2022 fell by 69.14% y/y in monetary terms – to $642.56 million. The basic export of pig iron and steel for the first 5 months of the 2022/2023 financial year fell by 21.33% y/y – to $6.1 billion. On the other hand, the import of pig iron and steel in April-July 2022 increased by 37.8% y/y – up to $4.84 billion.

According to one industry expert, while exports have fallen, there has been a sharp increase in imports of pig iron and steel. This is a cause for concern and requires government action to remedy the situation.

Ajay Sahai, the Federation of Indian Export Organizations’ (FIEO) CEO, says, that the duty structure for iron ore and semi-finished steel should be reviewed. A high export duty on these products was introduced in order to supply them to the domestic market. However, now the global demand for iron ore and semi-finished steel has fallen due to geopolitical reasons.

As GMK Center reported earlier, since May 22, India has introduced a 15% export duty on pig iron exports, unalloyed hot and cold rolled flat products, unalloyed coated rolled products, rebar, etc. In total, the duties on 11 types of metal products and raw materials were introduced.

The export duty on iron ore and concentrates was increased to 50% for all categories compared to 30% previously applied to “lump” ore with iron content above 58%. For iron ore pellets, a duty of 45% was introduced.

As GMK Center reported earlier, India’s steel imports has exceeded exports in July 2022 for the first time since January 2021. In July 2022, the country imported 444,000 tons of finished steel, which is 8% more than in July 2021.