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Copper industry seeks import duty hike on non ferrous metal to 7.5% from 5%

Copper industry seeks import duty hike on non ferrous metal to 7.5% from 5%

WASHINGTON: Saddled with higher imports and lower capacity utilisation, primary copper producers such as Hindustan Copper, Hindalco Industries and Vedanta have presented a budget wish-list to the government urging it to raise import duty on the non-ferrous metal to 7.5% from 5% now and reduce duty on imported raw material from 2.5% to nil.

The trio has a combined 10 LT annual production capacity in which Hindalco has the largest share of around 50%. With domestic sales at around 4 LT per year, these firms would have produced even less than the current level of capacity utilisation of 75% had there not existed a sizeable export market which now stands at 3.75 LT.

However, burgeoning imports is playing the spoilsport. Rising imports, 1.77 LT in 2014-15, have already taken a significant pie of the domestic market, capturing approximately, 31% of the share. India is self-sufficient and employs more than 10,000 people directly and indirectly.

With Japan and Asean countries are accruing duty benefits, as a result of their trade pacts with India, to dock products into India at a compounded annual growth rate of 25% over the last five years, making it difficult for the domestic industry to maintain viability. Imports were around 58,000 tonne in 2010-11 to stand at 1.77 LT in 2014-15.

The condition is set to worsen further with the customs duty on imports set to be zero by 2021 from 2.73% now for Japan and Asean countries. “India is at a significant disadvantage vis-a-vis China, Japan and Korea who secure copper concentrate through government-backed cheaper finance-linked investments-cum-strategic tie-ups in copper mines in Africa and Chile,” the industry said in its presentation.