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With Unsold Inventories Piling Up, Karnataka CM Kumaraswamy Writes To PM Modi Seeking Hike In Iron Ore Import Duty
A view of Earth movers at KIOCL mines (Kudremukh Iron Ore Company Limited), in Bangalore. (Deepak G Pawar/The India Today Group/Getty Images)
The Government of Karnataka has asked the Central Government to intervene and impose import duties on iron ore as the state has been facing the issue of unsold inventories, The New Indian Express has reported. As of now, the import duty is 2.5 per cent. Although there lies a heavy demand for iron ore, most producers prefer to purchase ore from outside Karnataka.
Chief Minister H D Kumaraswamy has written a letter to Prime Minister Narendra Modi regarding the issues being faced. After the apex court capped the annual production and restricted the sale to end-users via e-auctions, iron ore business has seen a slowdown. The surplus iron ore in the state is not finding any buyers.
“This has led to a situation where a huge quantity put up for sale on e-auction platforms remains unsold. The unsold stock may lead to closure of mine operations,” the chief minister’s letter explained the scenario to the prime minister.
Hence, the minimal import duty is cutting down domestic production and increasing current account deficit. The loss for the state is estimated at Rs 600 crore. Federation of Indian Mineral Industries has recommended that the government impose a 30 per cent import duty.
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