Monday, February 2, 2009

India: Steel Ministry Rejects MMTC Iron Ore Proposal

India's steel ministry has rejected the proposal to channel the country's entire iron ore exports through MMTC.

Opposing the idea mooted by MMTC, the Steel Ministry has said that such an idea was not possible as the government has favoured doing away with such a system as per the recommendations of the Hoda Committee.

"Ministry of Steel opposes the proposal made by MMTC. In fact, Department of Commerce should implement the decision of the Cabinet approving Hoda Committee&aposs recommendations. pertaining to discontinuation of the system of licensing and canalisation currently in operation for the export of iron ore," the Steel Ministry said in a letter to its Commerce counterpart.

In its proposal, MMTC had suggested a review of iron ore export policy and channelling overseas shipments through itself.

The rationale given by the trading agency in favour of its suggestion was better negotiating leverage for iron ore exports, resulting in improved sales realisations for mining industry, and higher trust in MMTC by importers.

However the Steel Ministry said it would not be prudent to nominate a single company as the sole trading agency for any item, as it may act as a non-tariff barrier to the trade in the era of economic liberalisation.

Source: Indopia

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