India has decided to put on hold its proposal to increase export duties on low-grade iron ore and pellets, following strong resistance from the domestic mining industry and state governments. The move reflects the government’s balancing act between safeguarding the steel industry, maintaining stable domestic prices, and supporting export competitiveness.

Industry Pushback

The Federation of Indian Mineral Industries (FIMI) has been vocal in its opposition, arguing that there is no shortage of iron ore in the country and urging policymakers to avoid unnecessary restrictions on exports. Top iron ore–producing states, including Odisha and Goa, have also opposed duty hikes, citing concerns over mining revenues and export competitiveness.

Price Volatility and Domestic Concerns

The debate comes at a time when iron ore prices are already rising domestically, driven by supply disruptions from heavy monsoon rains in Odisha and other mining belts. While the steel industry has been grappling with higher costs of medium- and high-grade ores due to a tight demand-supply balance, miners argue that curbing exports will not ease the situation but rather hurt revenues.

Past Precedents

This is not the first time India has imposed duties on the sector. In May 2022, the government introduced steep export taxes — 50% on low-grade iron ore and 45% on pellets — in a bid to cool domestic prices. However, the decision was rolled back just six months later in November 2022 after widespread complaints from miners and state governments.

Key Data Snapshot

Factor	Details
Current Export Duty	0% on low-grade iron ore and pellets
Proposed Duty (2025)	20–30% (halted after opposition)
Industry Resistance	Mining lobby (FIMI) states no shortage; opposes restrictions
Price Trends	Domestic iron ore prices rising due to monsoon-related supply disruption
Previous Duty (May 2022)	50% on low-grade iron ore, 45% on pellets
Rollback (Nov 2022)	Duties scrapped after industry complaints
Steel Industry Impact	Facing rising costs of medium- and high-grade ores
State Govt Position	Odisha & Goa opposed to duty hikes

Outlook

The government’s decision underscores the complexities in policymaking for India’s iron ore sector. With miners pushing for export freedom, steelmakers demanding price stability, and state governments wary of revenue losses, future duty changes will likely hinge on market conditions and political consensus. For now, the export duty remains at zero, preserving competitiveness in global markets.