The Associated Chambers of Commerce and Industry of India (Assocham) has appealed to the Government to reconsider the proposed relaxation of restrictions on iron ore exports in order to control India’s rising current account deficit (CAD).
In a letter to Finance Minister P. Chidambaram, Assocham argued that relaxations in export restrictions on iron ore would adversely impact the domestic steel industry.
Arguing that the industry was already reeling under severe crisis due to non-availability of iron ore for the last couple of years owing to suspension of mining in Karnataka and Goa by the Supreme Court as well as due to restrictions on undertaking mining activities in Odisha by the State Government, the industry body requested the Government to make the iron ore available to Indian steel producers instead.
It said due to rising steel demand, the domestic industry was likely to consume almost all iron ore produced in the country and might even have to import iron ore to fulfil their demands and so relaxation on export restrictions wouldn’t be a wise decision.
Suggesting measures to control CAD, the chamber said that it can be done by reducing imports of finished steel and coking coal as India imported about eight million tonnes (mt) of finished steel and about 35 mt of coking coal worth about $5 billion and $7 billion respectively., It also said that the Jharia coalfield in Jharkhand could be developed to further to reduce coking imports.