UCCIL Warns 30% Export Duty on Low-Grade Iron Ore Could Hit Industry and State Revenues

The Utkal Chamber of Commerce and Industry (UCCIL) has raised concerns over the recently announced 30% export duty on low-grade iron ore, cautioning that it could have wide-ranging repercussions for the mining sector and the states that rely heavily on mining revenues. Industry representatives argue that the levy may trigger a decline in production, put downward pressure on domestic prices, and erode India’s competitiveness in global iron ore markets.

According to UCCIL, the new export duty could reduce overall mining output as producers reassess the profitability of low-grade ore extraction. “This levy is likely to create a market imbalance, discouraging production and impacting the supply chain across the steel and allied industries,” said a senior UCCIL official. The chamber emphasized that such a move could also affect downstream industries dependent on iron ore, including steel manufacturing and construction.

The economic impact extends beyond the industrial sector. UCCIL estimates that mining-intensive states could collectively face revenue losses exceeding ₹16,200 crore. These losses could significantly affect state budgets, curtail public spending, and disrupt local economies that depend on mining-related employment.

Employment in the mining sector is also expected to take a hit. Reduced production may lead to lower workforce requirements, affecting thousands of workers, contractors, and allied service providers. Additionally, the manufacturing capacity of steel plants and other industries reliant on iron ore could be constrained, creating further economic ripple effects.

UCCIL has urged policymakers to carefully reconsider the duty structure and explore measures that balance revenue generation with industry sustainability. Stakeholders highlight that a sudden increase in export duties could weaken India’s global trade position at a time when domestic and international steel demand is evolving.

Industry experts say a more calibrated approach could ensure state revenues are protected without compromising employment, production, or export potential. The chamber’s warning reflects a broader concern about maintaining the delicate balance between fiscal policies and industrial growth in India’s resource-driven economy.