Industry body Assocham today asked the government to impose 30 per cent export duty on iron ore pellets, fines and lumps with immediate effect to discourage circumvention of export duty and increase iron ore availability for domestic steel industry.

"Iron ore production in India has plummeted significantly by 14 per cent to 70 million tones (mt) in the first half (H1) of 2013-14 from 82 mt in the corresponding period last year," Assocham said in a letter addressed to Finance minister P Chidambaram. "Ironically, while the domestic iron and steel industry is facing severe shortage of iron ore and is operating at very low capacity utilization, at the same time the exports of iron ore are registering a triple digit growth on sequential quarter basis," it said in the letter.

Pointing out that exports of iron ore surged by a whopping 129 per cent to 5.33 mt in the second quarter (Q2) of 2013-14 from 2.33 mt in the first quarter, Assocham said: "Rampant exports of iron ore from India have made it a rare commodity for the domestic iron and steel industry."

According to Assocham, growth in iron ore exports is due to massive difference in exports duty of pellets and iron ore as there is 30 per cent duty on iron ore lump and fines whereas pellet exports do not attract any duty.

"Iron ore producers in India are taking an advantage of zero export duty on pellets and circumventing exports of iron ore through pellets," Assocham said.