It's one thing to tax miners – à la Australia – to keep more of the proceeds of mineral wealth at home. It is quite another to ban exports completely. An idea tossed around for the past few years returned to New Delhi this week, as steel secretary Atul Chaturvedi mulled a total ban on shipments of iron ore.

However appealing the ideal of self-sufficiency, it is a non-starter in practice. India exported 106m of the 230m tonnes of iron ore it produced last year, making it the world's third-largest exporter. Banning shipments would devastate miners specialising in powdery iron ore fines – 85 per cent of exports – while doing incalculable damage to trade relations not just with China, India's number one customer, but Japan and South Korea too. Further, in an era of yawning fiscal deficits – India's should be 5.5 per cent of output this year, among Asia's highest – shutting off stable sources of sales, and thus tax revenues, would be wilfully perverse.

As with many eccentric schemes, though, there is a core of sanity. India's reserves, a third the size of Australia's, are being run down faster. Ten years ago Indian ore accounted for 8 per cent of the world seaborne market; last year it was 13 per cent. Ministers are entitled to be spooked, too, by China's apparently voracious appetite; 75m tonnes of ore were stashed at various Chinese ports on Friday, a near-record high. But that is why the solution lies in higher rates of taxation: having lifted duties on fines and lumps last December, India should trim exports this fiscal year by about 10 per cent. The infrastructurally-challenged country may be impatient to lift its steel consumption intensity – seven times lower than China's, and 13 times lower than Japan's. But eviscerating miners is not the way to go about it.