NEW DELHI: Federation of Indian Chambers of Commerce and Industry (FICCI) is rooting for introducing export duty on bauxite in Budget 2013. FICCI has recommended introduction of the duty as it feels that bauxite is India's natural advantage and it does not make economic sense to export it without value addition.
The industry body maintains that export without any duty is equal to export of jobs and this endangers the long-term resource security for domestic aluminium industry.
India has the sixth largest reserves of bauxite in the world. However, the advantage has been negated in the recent years as many alumina refineries, for whom bauxite is the basic raw material, in India are finding it difficult to source bauxite of an appropriate quality.
"Delays in mine clearances and the expansion of alumina refining capacity in India over the recent years has played role in its depreciation. But the problem has been further intensified by the export of bauxite from India," says FICCI.
China has been adding alumina capacities very aggressively over the last few years, leading to increased demand for imported bauxite. However, after Indonesia, which was a major source of bauxite for China imposed restrictions on export of bauxite, its intake from India has increased sharply.
Consequently, domestic bauxite availability has become challenging. Some refineries have been forced to curtail production in the recent months due to non-availability of bauxite. Deterioration in quality of bauxite also increases the conversion cost for refineries, argues FICCI.
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