Indian bauxite export drops after levying of 20% export duty on bauxite

<p>India has a total bauxite resource of 3,480 million tons( according to UNFC system) &nbsp;which includes 593 million tonnes reserves and 2,887 million tonnes remaining resources. By grades, about 84% resources are of metallurgical grade. Odisha alone accounts for 52% of country's resources of bauxite followed by Andhra Pradesh (18%), Gujarat (7%).</p> <p>The last reported production of bauxite in India stood at 21.6 million tons in 2013-14 increased by 30% as compared to previous year, due to good demand in domestic market and also from China. Odisha emerged as the leading producing state accounting for about 35% of the total production. Next in the order of production is Gujarat (32%).</p> <p><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/bauxite%20export1.jpg" alt="News" width="512" height="255" /></p> <p>If we look at the export statistics of Indian bauxite for last three years, we can understand the trading patterns.&nbsp; Exports of bauxite stood at 5.7 million tons in 2014 and the total value of bauxite export was USD 338 million. Exports were mainly driven by China (almost 84%).</p> <p>In 2015, exports of bauxite increased to 8 million tons and the export value stood at USD 484 million. The increase in export was driven by China as the country looked for alternative bauxite sources when Indonesia imposed a ban on ore export in 2014 creating a sudden lull in the hyperactive export market. Before the ban China was dependent almost entirely on Indonesian bauxite to run their alumina refineries.</p> <p><img style="display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/bauxite%20export2.jpg" alt="News" width="512" height="254" /></p> <p>However, in 2016, the estimated bauxite exports dropped to 6.2 million tons bringing down the export value to USD 228 million. The drop was a side effect of the fact that Export duty on Bauxite has been raised from 10 % to 20 % in the 2014 budget.&nbsp; Government raised export duties on bauxite to help local aluminium producers with domestic bauxite supply, which were facing a shortage of the mineral because of mining restrictions. This increased Export duty would send a signal to the exporters and also to the importing countries like China on Indian&rsquo;s long term Aluminium Policy.</p> <p>China imported about 6 million tons of bauxite from India in 2014 which increased to 7.8 million tons in 2015 and again estimated to drop to 6 million tons in 2016. The trend reflects the changing trade policies in India and Indonesia in last three years.</p> <p><strong>{googleAdsense}</strong></p> <p>Bauxite exporters from India have been demanding the removal of export duty on bauxite. During the current budget, the bauxite duty has been marginally reduced to 15%. According to All India Association of Industries Indian bauxite has substantial demand in the global market but, price of Indian bauxite becomes uncompetitive due to the extra custom duty. Since, most of the bauxite that gets exported is from Gujarat and is Bohemetic&nbsp;in nature; they are not of much use for the domestic aluminium producers. Rather than trade restrictions, it is a solution to the domestic mining issues which can eventually help the domestic aluminium producers. And the recent amendments in the MMDR act is expected to bring about the change.&nbsp;</p>