Mumbai: Despite being the fourth largest producer of iron ore, India's imports of mineral rose a whopping 157 percent during April-December 2018 mainly due to higher logistics costs for sourcing it domestically and lower import duties, says a report.
Out of the total imports of 11.75 million tonne in 9M FY19, which was a 157 per cent rise as compared to a year-ago, Australia's share was highest at 57 per cent, which has more than tripled compared with corresponding period last year, domestic rating agency CARE Ratings said.
The other countries from which India imports iron ore and its shares are South Africa (19 percent), Brazil (15 percent) and Bahrain (5 percent).
Read more:Spicejet tanks 8% after India bans Boeing 737 Max 8 plane…
In July 2018 alone, imports peaked at 1.93 million tonne, the highest in any month in past five years, the agency said in its report.
"Surge in imports can be attributed to varying ore grades in multiple iron ore producing states, which leads to price differences. While the logistics cost for steel plants located on coastal areas rose, steel players shifted to imports for sourcing their key raw material, instead of buying at inflated domestic prices," it said.
In addition to this, a significantly low import duty of 2.5 percent encouraged iron ore imports in the country, it said.