Industry body ASSOCHAM today urged the government to remove 2.5% import duty on iron ore lumps, fines and pellets to increase supply options for the steel industry.

It welcomed the recent increase in export duty on iron ore from 20 to 30% but said there is still a dearth in supply of raw material. This has severely affected the steel industry with most plants running well below full capacity utilization.

The Supreme Court has imposed a blanket ban on mining in Karnataka and prohibited exports of iron ore from the state. ASSOCHAM secretary general Mr DS Rawat in communication to finance minister Mr Pranab Mukherjee said that “The steel industry continues to struggle for availability of raw material and explore the more expensive import route to source it.”

He said that the 2.5% import duty on iron ore adds to the disadvantages of steel industry as the import route is already considerably expensive. Levying it to discourage imports is largely an anomaly in the duty structure.