India's iron ore exports should pick up after the government cut taxes and announced a $4 billion additional spending to revive sluggish demand, analysts said on Monday.

 

But the measures are unlikely to turn the trend dramatically in the current financial year that ends in March 2009, they said.

 

"We will be able to export more iron ore than we have been," said R.K. Sharma, secretary general of the Federation of Indian Mineral Industries. "It will definitely make our iron ore more competitive." India on Sunday scrapped an export tax on iron ore fines and cut central value-added-tax across the board by 4 percentage points on all manufactured products other than petroleum.

 

Glenn Kalvampara, secretary of the Goa Mineral Ore Exporters' Association, said the moves would help iron ore exports from the western tourist state but would still be below a year earlier.

 

He forecast iron ore exports from the state at around 26 million tonnes in 2008/09, also helped by demand from China, the biggest market for Indian ore.

 

This would be higher than earlier projection of around 20 million tonnes, but below 33 million tonnes exported in 2007/08.

 

Sharma said India's total exports of iron ore could be around 95-100 million tonnes this year, against 104 million tonnes in 2007/08.

 

Analysts said the economic stimulus package, which came after Islamist militants attacked Mumbai in November had dented confidence already reeling under a global economic turmoil, would not crank up consumption in a big way.

 

"The worst that we had been imagining may not happen," said Pawan Burde, senior research analyst at Angel Broking. "But this is not enough -- it will not completely revive consumption."(Source: Reuters)