There is periodic debate around restricting exports of low-grade iron ore, but a comprehensive review of data and industry evidence makes one fact clear: India has no shortage of iron ore, and domestic steelmakers are not deprived of raw material. Exporting low-grade fines, which has no domestic demand and presents environmental challenges, serves national economic, environmental, and industrial interests. Also, iron ore production has been exceeding domestic demand by a good margin year on year.
Multiple technical studies, resource-mapping exercises, and beneficiation assessments conducted over the years consistently confirm that India possesses abundant iron ore reserves. Iron ore production has risen steadily in line with steelmaking growth and is expected to increase further following the transformational MMDR Amendment Act, 2025, which will bring several new mineral blocks into operation.
Production-consumption data underscores this surplus. India’s crude steel output rose from 103.54 million tonnes (MT) in 2020–21 to 152.18 MT in 2024–25. Correspondingly, iron ore requirements increased from 171 MT to 251 MT. Over the same period, iron ore production expanded from 205 MT to ~290 MT, consistently exceeding domestic demand by 30–40 MT, according to data from the Indian Bureau of Mines (IBM), the ministry of steel, and the ministry of commerce & industry.
Claims that beneficiation capacity is constrained due to lack of ore are also not borne out by facts. Most beneficiation operators can source iron ore as required from nearby mines in case captive source is not available. Where utilisation remains sub-optimal, the causes are largely techno-commercial, including technology adoption gaps, tailings handling challenges, and pricing economics rather than any physical shortage of ore.
{{/usCountry}}Claims that beneficiation capacity is constrained due to lack of ore are also not borne out by facts. Most beneficiation operators can source iron ore as required from nearby mines in case captive source is not available. Where utilisation remains sub-optimal, the causes are largely techno-commercial, including technology adoption gaps, tailings handling challenges, and pricing economics rather than any physical shortage of ore.
{{/usCountry}}Importantly, India’s steel industry predominantly uses high-grade iron ore (+58% Fe), for which domestic supply remains adequate. The low-grade fines below 58% Fe that dominate exports have virtually no domestic demand. Hence, the claim of supply deprivation is factually incorrect.
The difficulties faced by India’s steel sector stem primarily from market and structural factors, not iron ore availability. Linking these challenges to low-grade iron ore exports is therefore misplaced and distracts from the reforms needed to improve sector competitiveness.
India’s experience in 2022 of trying to shackle exports offers a clear warning. The imposition of a 50% export duty on low-grade iron ore and a 45% duty on pellets led to a collapse in exports, sharp production cuts, and the build-up of environmentally hazardous stocks. State revenues suffered significantly, with Odisha alone losing over Rs. 12,000 crore within six months. Recognising these consequences, the government rolled back the duties within months. Reintroducing export restrictions would merely repeat a policy experiment that has already been tested and debunked.
Exports of low-grade iron ore are far from marginal and represent a significant and stable source of foreign exchange for the nation. Ministry of commerce data shows that India has exported between 15 and 43 MT of iron ore annually over the past five years, with the bulk comprising fines below 58% Fe. In FY25 India’s overall iron ore exports were ~31MT respectively of which ~23.5MT comprised fines. Using conservative international price benchmarks, overall iron ore exports are estimated to have generated $ 4–13 billion over the past five to six years – including foreign exchange earned from export of iron ore fines, a material that has little or no domestic utility and would otherwise remain stranded at mine sites thereby obstructing mining of higher-grade ore.
Without export avenues, these iron ore fines accumulate at mine heads, creating serious environmental and operational risks. Stockpiles lead to dust pollution, runoff contamination, land degradation, and safety hazards. More critically, accumulated dumps block access to high-grade ore bodies, forcing miners to curtail production and threatening employment in mineral-rich regions. Exporting low-grade fines is, therefore, a scientific mining necessity, enabling safe, sustainable, and environmentally responsible extraction.
This article is authored by Ranganath Tannir, secretary general, Think Change Forum.