Indian miners had re-aligned the price of iron ore recently which the importers in China could not absorb and thus resulted in an 11% decline in India's outward shipment of iron ore. The prices were re-aligned by imposing an export duty on raw material. The duty was imposed by the government. China started importing from alternative markets like Australia and Brazil.

From 13.85 million tones in December 2008 the iron ore exports slipped to 12.37 million tones in December 2009. The data was compiled by the Federation of Indian Mineral Industries (FIMI) which is the representative body for iron ore miners.

RK sharma, FIMI's seceratory General attributed the decline to the government's decision of applying a 5 percent ad valorem duty on fines and 10 percent on lumps and the duty would be effective from Dec. 2009. Industry observers anticipate the ad valorem duty to increase to 20% and if that happens the iron ore exports would definitely fall to zero, says Sharma. 104-106 million tones are what the expectation is this year for iron ore exports.

FIMI has requested the government to withdraw this duty to facilitate trade again between India and China.