The domestic steel industry has better lobbyists in Delhi to help it not only raise prices at will without any government action but also to fix the export duty on the iron ore to suit its demand.

It is thanks to these lobbyists that Finance Minister Pranab Mukherjee raised the iron ore export duty on Thursday back to the level of 15 percent that was slapped in June 2008, and that too within four months of raising it from five percent to 10 percent. These lobbyists' role is also clearly visible in the basic custom duty on stainless steel melting scrap being halved from five percent to 2.5 percent.

The iron ore industry should be happy that the government spared iron ore fines from further export duty hike. They attract five percent duty as against nil until last December.

The year 2008 was the worst year for the mining industry as the government kept changing export duty on the iron ore, affecting the long-term contracts with the foreign buyers, all because of the lobbying by the domestic steel industry.

In June 2008, a flat rate of 15 percent export duty was slapped on both iron ore lumps and fines. The iron ore fines saw a flat rate of Rs 200 per tonne imposed in October and then changed to eight percent a month later. The export duty was finally withdrawn from the fines and reduced to five percent on lumps in December when the exports slumped sharply.