China continues to lap up more of Indian iron ore

Last Updated : 30 May 2012
NEW DELHI (Commodity Online): Export of iron ore and other minerals continue to be main stay of India’s exports to China even as ban on illegal mining had dented the quantum of ore exports in 2011-12.

According to Associated Chamber of Commerce and Industry of India (ASSOCHAM), one-third of India’s exports to China comprised the ores, minerals in 2011-12. In 2010-11, 55% of India’s exports to China was accounted for by ores and minerals, mainly iron ores. . Needless to say, the domestic industry engaged in sectors like steel has been raising the issue rather seriously.

Ores, minerals, agri-commodities accounted for about 45% of total exports in 2011-12, compared to 55% of total exports recorded in 2010-11. The higher content of primary commodities shows that the nation’s basic wealth is being shipped to China where it is turned into value added commodities possibly for export as well.

Even though there is a global slowdown, the Chinese importers of ores and minerals would not reduce the off take as they would like to build strategic reserves of such critical raw material.

US and Europe are major importers of India’s primary products but it is predominantly agricultural products than ores and minerals, ASSOCHAM said.

“After all, export of mineral resources sucks our natural resources leaving little for value-added manufactured products in the country, “ASSOCHAM Secretary General D.S. Rawat said.

In 2011-12, the engineering goods were the second biggest item of exports to China, followed by petroleum products. The Chemical and related products also accounted for sizeable portion of India’s shipments to China, the data analytical study found.

Engineering goods exports accounted for about 22 per cent of India’s total shipments to China in the previous financial year, while petroleum products claimed about 13-14 per cent of India’s outward shipments to the neighbouring country.
Chemicals and the related product’s share in India’s total exports to China was about 7-8 per cent. Interestingly, the share of petroleum exports to the Chinese market for India’s total exports has leapfrogged from negligible 1-3 per cent a year ago to 13-14 per cent in the last fiscal.

India suffers a big trade deficit with China and these three-four items, other than minerals and ores, can be used for bridging this gap. “A conscious effort must be made to decrease share of ores and minerals to China, “Mr Rawat said. Though it is a difficult task, given lack of markets for other Indian products in rest of the world, the country must take steps in this regard for the interest of long–term security of these natural resources, said the ASSOCHAM secretary general.