MUMBAI: India has reduced the railway freight on iron ore meant for exports by 16 per cent effective Tuesday, an industry body official said, a move expected to help exporters who have come under pressure after an increase in export duty in January.
The new freight has been set at 2,425 rupees per tonne of iron ore, down 475 rupees from the previous freight cost, said H C Daga, vice president with the Federation of Indian Mineral Industries.
“Exports (of iron ore) had already become unviable and this is a beginning in right direction, but it needs to be reduced much more,” Daga said.
India hiked iron ore export duties to 30 per cent in January to conserve supplies for its own steel industry, making shipments unviable and prompting traders to slash their export forecast for the year to March 2012.
“This will help exporters reduce losses and if they reduce export duty on lower grades, it would be even better,” said Dhruv Goel, managing director with SteelMint, an iron ore trading firm.
India is one of the world's biggest exporters of iron ore and ships much of its product to China, which has the world's largest steel industry.
Iron ore exports are yet to resume from the southern state of Karnataka, which accounted for a quarter of shipments before the state government imposed a ban, even after the Supreme Court ordered the ban lifted in April last year.
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