Bauxite exporters are clamouring for removal of export duty on the ore similar to a cut in duty for iron ore in the budget. Higher duties have led to a sharp fall in India's share in the export market in recent years with Australia and Malaysia increasing their share.

"We are losing out to countries like Malaysia and Australia when it comes to exports to China. The duty cut on bauxite ore in the recent budget from 20% to 15% which is too little to resuscitate the bauxite export industry which is already battling headwinds from the meltdown in the global commodity markets. It should be reduced to zero like in the case of iron ore," C K Joshi chairman Gujmin Industry Association said.

China produces and consumes nearly half of world's aluminium and is dependent on imports for bauxite and refineries in that country can use various blends of bauxite irrespective of grade. Hence lower grade bauxite ore from the west coast of India, which is not used by domestic metal manufacturers, is exported to China making up around 14% of the latter's import requirements. Certain small mine owners and export aggregators have over last 10 years taken the initiative to mine and export these low-alumina ore that offers direct and indirect employment to some 50,000 people in Gujarat and Maharashtra. However, in the last three years while price of this ore from Gujarat has become uncompetitive due to high export duty, China has been relied on other sources for importing bauxite namely Malaysia, Australia and Guinea.

While Australia has increased its bauxite exports to China by 27% from 15.04 million tonne in 2014 to 19.14 million tons in 2015, Malaysia on the other hand increased its exports to China by almost ten times from 2.82 million tonne in 2014 to 22.36 million tonne in 2015. Australia imposes no export duties on bauxite, whereas Malaysia imposes a nominal one. "The present situation is such that 50,000 people are likely to lose their jobs in Gujarat and put nearly $700 m worth of export earnings at stake," Mr Joshi added.

While export duty on iron ore and chromium ores was reduced from 30% to zero in the recent budget, duty on bauxite ore was reduced from 20% to 15%. "Prices of bauxite ore have crashed to around $38-40 per tonne due to crash in commodity prices. For exporters of ore, prices are now uncompetitive. Hence they are seeking a slash in duty," a mining sector analyst pointed out.

With China investing in large smelting capacities in Guinea, which holds the world's largest reserves of bauxite, exporters do not want to miss out on an opportunity.