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Tax on iron ore exports aimed at conserving raw material: Chidambaram
March, 29th 2007
Amid a threat of Chinese boycott of Indian iron ore due to imposition of Rs 300 per tonne duty on Indian iron ore exports, the Finance Minister, MR P Chidambaram today defended the measure saying it will ''conserve'' the country's raw materials for the domestic steel industries.

"There is no controversy. As I said in my budget speech, it is intended to conserve raw materials for our own steel industry and at the same time, create some revenues taking note of the fact that the prices are ruling very high,''

Mr Chidambaram said here after inaugurating the full-fledged branch of Bank of India, where the Communist giant initiated the Special Economic Zone (SEZ) for the first time. The new policy, announced by Chidambaram in February in his budget speech, is re garded as the first move by India to conserve scarce national resources.

But, Chinese importers have decided to boycott Indian iron ore in protest against Indian suppliers' attempts to increase iron ore prices.

India announced a duty of Rs 300 ($6.78) per tonne of iron ore exported from March 1, and the Chinese importers say Indian exporters intend to transfer the increased costs to Chinese buyers, even for contracts signed but not executed before March.

As the world's biggest producer and consumer of steel, China imported a record 325 million tonnes of iron ore in 2006 and 8.3 million tonnes came from India, according to media reports.

 
 
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