India Holds Off on Export Duty Hike for Low-Grade Iron Ore, Pellets

India is unlikely to raise export duty on low-grade iron ore and pellets in the near term, as strong resistance from the domestic mining industry delays the government’s plans. Officials had been considering a hike of 20–30% from the current zero duty, but growing opposition has slowed decision-making.

Industry groups, including the Federation of Indian Mineral Industries, argue that low-grade ore is not consumed by domestic steelmakers and restrictions would hurt miners. State governments of Odisha and Goa, both major iron ore producers, have also voiced opposition. Meanwhile, iron ore prices have climbed in recent months due to monsoon-related supply disruptions.

Experts note that the steel industry’s main challenge lies with the higher cost of medium- and high-grade ores, not low-grade ones. India previously imposed steep duties on ore and pellet exports in May 2022 but rolled them back months later after miners reported significant export losses.

The decision reflects the competing interests that shape India's mineral-export policy: fiscal considerations pointing toward higher duties, industry and state-government pressure pushing for market access, and steel-sector economics that turn on medium- and high-grade rather than low-grade ore. The 2022 precedent - duty imposed, then rolled back within months - suggests policy will continue to move in response to sector conditions rather than settling into a stable long-term framework.

For the domestic mining industry, the deferral protects near-term export revenues from Odisha and Goa producers. For downstream steel manufacturers, the more strategic questions relate to raw-material security for higher-grade ores and to the emerging need to demonstrate responsible-sourcing credentials as international steel buyers increasingly apply CBAM and ISSB-aligned disclosure requirements to imported material.

Cognitud's market intelligence, responsible investment and sustainability due diligence teams help mining and steel-sector clients model policy risk across scenarios, benchmark responsible-mining practices against IRMA and TSM standards, and structure disclosures that support access to international capital markets, offtake relationships and progressively carbon-priced export markets.