MUMBAI (Reuters) - Indian steel firms have sought to curb import of cheap steel and impose a 15 percent export tax on iron ore to ensure supplies to local companies, in budget 2009 to be presented on July 6, officials said.

"First demand is stopping cheap imports to India. Iron ore exports should also be discouraged. More and more ore should be made available to Indian companies," MVS Seshagiri Rao, managing director with JSW Steel said.

Indian steel firms have been demanding a safeguard duty or anti-dumping duty on cheap steel imports to support prices and boost demand for local products.

However, in May a government panel had rejected their plea for a 25 percent duty as "unjustified" but officials said they would renew their demand for a safeguard duty. There is already a 5 percent import duty on most steel items.

Mumbai-based brokerage Gupta Equities said in a report the demand for a safeguard duty for imports is unlikely to be met as steel producers have raised prices recently.

Tata Steel Ltd, India's No.2 producer, raised prices for hot-rolled and cold-rolled coils by up to 2 percent in June, while Ispat Industries and JSW Steel told Reuters they may hike prices next month.

Besides, officials have sought to raise ad valorem export tax on iron ore to 15 percent to ensure supplies to local firms. Currently, iron ore lumps attract a tax of 5 percent while fines are not taxed.

The cost of producing one tonne of steel grew by more than half for most Indian steel firms last year, with prices of key raw material - iron ore and coking coal - hitting record highs.

For this reason, steel firms who source raw material from local or overseas miners are scouting out for mines both in India and abroad to secure their raw material supplies.

The firms have also asked the ministry to grant infrastructure status to steel industry to ensure availability of long-term funds and for tax holidays, officials said.

"That has been a long-standing demand of steel industry," a spokesman at Ispat Industries Ltd, said.

"Not only for tax holidays, but also for long-term funding and overseas funding steel industry has been asking for this status."