India has abundant reserves of low grade iron ore, which cannot be used for making steel. The country has only 10% of high grade iron ore which is used in steel making. As a result there is a pressing need for steel makers to adopt the pelletisaton technology. Pelletisation is the process of converting low grade iron ore into high grade ore. In order to promote this technology the Indian government has removed export duty on pellet exports. The government has not tinkered with 30% export tax on iron ore announced in December last year. It has now also brought down customs duty to 2.5% from 7.5% on capital equipment. This will spur India's steelmakers to go for pelletisation of iron ore mines in a big way. India has also invited Chinese steel makers to invest in this technology. At present low grade iron ore is exported out of India to the world's largest steel consumer China. This is because very few steel manufacturers and iron ore miners in India have the technology to use it. It is a win-win deal for Chinese steel industry to set up pelletisation plants in India. This would make up for the extra expenditure being incurred by them in view of 30% duty on iron ore exports from India.