India exported iron ore worth 4.7 billion dollars in 2010-11 and imported finished steel worth 11 billion dollars, thus contributing negatively to widening trade deficit and draining foreign exchange reserves.

Conservation of iron ore is in the national interest as reserves may run out rapidly due to projected growth of the economy, said The Associated Chambers of Commerce and Industry of India.

“We have always advocated a complete ban on iron ore exports. However, discouraging them through fiscal measures is an appropriate solution to utilise large mining, infrastructure and port capacities created for iron ore,” said secretary general D.S. Rawat.

A nine per cent growth in GDP will create demand for 113 million tonnes of steel and 206 million tonnes of iron ore by 2016-17 as the country embarks on several infrastructure projects. The current production of iron ore is 208 million tonnes of which 98 million tonnes is exported.

“It is imperative that India conserves its iron ore resources to safeguard long-term sustainability of the steel industry,” said Rawat, adding the crackdown on illegal mining by the Supreme Court has led to severe shortage in availability of iron ore to the domestic steel industry.

China had imposed a duty of 40 per cent on exports of coal and coke for value addition within the country. This led to creation of the world’s largest steel manufacturing capacity and accelerated China’s GDP growth, he said.