As demand for reduction in export duty on iron ore gets louder, many exporters have confined their shipments in anticipation. However, industry experts believe that cut on duty will not revive exports of iron ore to a large extent.
Currently, exports are only taking place from Indian east coast primarily from Paradip port, for the reasons that many exporters have been re-allocated plots, which were seized some time back.
Another reason is low truck freight rate from mine gate to Paradip port.
“No one is using the railway as mode of transport due to differential freight charges. Where it costs Rs 1,800-1,900/MT through truck, it will cost around Rs 2,800-2,900/MT using railways (Barbil- Paradip port).” said an exporter based in eastern India.
In case duty is reduced to say 20% or 15% (currently 30%), domestic fines prices and truck freights will go up, leaving with no scope of exports. Exports will only revive when railway freights are reduced, he further added.
In case duty is completely abolished or reduced to 5%, certainly there are chances that exporters will use the railway as mode of transport and exports will boom.
If it happens domestic iron fines prices will shoot up, hurting domestic industry, which government would not want to happen.
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