Indian Steel Minister Ram Vilas Paswan is worried that Indian companies will face shortage of iron ore in near future as the demand of iron ore is increasing in India. His fear is not illogical at all. Indian economy is growing consistently and Indian government is now more serious about infrastructure development than ever before. Indian steel industry is also expanding fast. So, Ram Vilas Paswan has asked Indian government to restrict the export of iron ore.
I do not agree with this view and here I am giving five reasons.
- Free market economy: In free market economy you cannot simply ban export of a product. Suppose, other iron ore producers follow Indian example and ban export of iron ore.
- Good price: India is getting good price for its iron ore these days. So, India should continue to export iron ore and earn foreign exchange.
- Exploration: Instead of stopping export of iron ore, Indian government should try to explore new areas for iron ore. India is rich in iron ore and sophisticated exploration may result into discovering new mines.
- Foreign mines: Indian companies should explore in the foreign countries and secure iron ore mines.
- Protectionism destroys competitiveness: Instead of protecting iron ores, Indian government should let its companies fight in the international market and survive and grow stronger.
Having said all these, I must admit that Mr. Paswan has a strong case. So, Indian government should either seriously explore new areas for iron ore or restrict export of iron ore to some extent.
Do you agree with me?
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