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Karnataka to incur Rs 29k crore loss due to iron ore export ban

Federation of Indian Mineral Industries appeals to State Govt to take corrective steps

Published: 20th August 2020 04:23 AM  |   Last Updated: 20th August 2020 04:23 AM   |  A+A-

Iron Ore

For representational purposes

By Express News Service

BENGALURU: The Federation of Indian Mineral Industries (FIMI), Southern Region, has made an appeal to the State Government to take appropriate steps to rectify the imbalance that has arisen due to the prohibition on iron ore exports from the State. The restrictions on the trade of iron ore in Karnataka is suppressing the growth of the sector and has significant deleterious effects on the industry and also the state exchequer.

As per estimates, the gross loss over a 10-year period to the State of Karnataka is approximately Rs 29,058.8 crore due to the ban of iron ore exports, the federation stated. Karnataka had imposed a ban on the export of iron ore in 2010 and that was subsequently upheld by the Supreme Court. The federation stated that the rest of India is exporting iron ore as per the EXIM policy of Government of India thereby ensuring fair revenue to the State Exchequer including foreign exchange as well as overall growth of the nation by using the railways and port facilities among others.

“As per the data available, the total exports in the year 2019 from other parts of India shows export of 10.34 MMT of fines and 1.16 MMT of lumps. While, during the same period, Karnataka lagged when there is a surplus of 5.19 MMT fines arising due to additional production from auctioned C-category leases and expired leases. Hence, an alternative market is urgently required since surplus iron ore may remain unsold even if the entire domestic demand is met from leases in Karnataka and without recourse to material from outside the State,” the federation stated.

Old stocks In 2018-19, approximately 6.67 MMT of iron ore was imported into Karnataka as a substitute for locally produced iron ore, thereby leaving unsold stock in mines and causing a loss of revenue to the State. These imports have also affected the sale of 8 MMT of old stocks, the federation added.

More from Karnataka.

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