India is currently pausing plans to raise its export duty on low-grade iron ore and pellets due to increasing resistance from the domestic mining sector, according to a source familiar with the situation. The government has been considering an increase in export duty to a range between 20% and 30%, up from the current rate of zero, as noted by the source and two industry executives.
However, significant opposition from the mining lobby suggests that a decision on this issue is unlikely in the immediate future. The Indian finance ministry has not responded to an inquiry from Reuters seeking comment on the matter.
The main mining industry association recently approached the government to voice objections to the proposed increase. B.K. Bhatia, director general of the Federation of Indian Mineral Industries, stated, “There is no dearth of iron ore in the country, and we have appealed to the government not to impose restrictions on low-grade iron ore because the steel industry does not use it.”
In recent months, domestic prices of iron ore have surged, attributed to supply disruptions caused by heavy monsoon rains. According to commodities consultancy BigMint, prices of iron ore fines in the major eastern production state of Odisha were 7% higher in August compared to the previous month due to these interruptions.
Additionally, state governments in Odisha and Goa, India’s leading iron ore producers, have expressed their opposition to any increase in export duties. Lalit Ladkat, a senior analyst at CRU, a London-based consultancy, noted that the steel industry faces challenges primarily due to the rising prices of medium- and high-grade ores, stemming from a tight demand and supply balance for these grades.
In May 2022, the Indian government imposed a 50% duty on exports of low-grade iron ore lumps and fines with an iron content of less than 58%, along with a 45% duty on pellets, aiming to address the growing domestic demand. However, this decision was reversed in November 2022 following persistent complaints from miners regarding lost export opportunities.
(Reporting by Neha Arora; Editing by Mayank Bhardwaj and Clarence Fernandez)
Published on September 17, 2025
