Vedanta to benefit from India's rejigged commodity tariffs

Shares in Vedanta surged on news that India will shelve export taxes on low-grade iron ore, a move that should benefit the FTSE 250 miner but could lead to further worldwide oversupply.

In its annual budget India's government said it will scrap the export tax on low grade iron ore but it plans to impose a higher import duty on aluminium, another commodity Vedanta produces.

Currently there is a 10% tax on iron ore 'fines' with 58% content or less, while lower-grade lumps are hit with a 30% levy.

The import duty on aluminium will be raised to 7.5% from 5%.

"The iron ore duty cuts will help miners liquidate stocks at a time when international prices are low," mines secretary Balvinder Kumar told Reuters, adding that the aluminium duty was designed to boost local manufacturing by stemming the flow of cheap imports from countries like China.