KOLKATA (miningweekly.com) – India’s Federation of Indian Mineral Industries (FIMI), the apex representative body of miners, wants a 2.5% import duty on copper concentrates scrapped, questioning its economic rationale in view of nonavailability of copper in the domestic market.
In a memorandum submitted to the Finance Ministry, FIMI has urged the government to scrap the import duty in the forthcoming national Budget for 2020/21 to be placed before the Parliament next month.
The miners’ body said that primary refined copper played a critical role in ensuring adequate availability of the strategic metal but noted that India was lacking mineral copper resources. Hence, the copper industry has been lobbying the government for several years, seeking a reduction in import duty on copper concentrate – the basic raw material for downstream copper industry.
It has been pointed out that the domestic copper industry is under compulsion to source a major quantity through imports, as domestic availability is only 4% of total demand. Copper concentrate is the starting point of the value chain for most industry players and hence FIMI argues that it makes economic sense to scrap the current import duty.
Major copper producing countries like China, Japan, South Korea and European Union are already importing copper concentrates at nil import duties. A nil rate in India would make domestic smelters more competitive and enable them to compete with finished products coming into the country at nil rate under various free trade agreements that India has concluded with exporting countries, FIMI said.
Alongside, the miners body has sought an increase in import duty on copper scrap to 7.5% from current rate of 5%. Citing a report of International Copper Association of India (ICAI), it said that in 2016, copper scrap processing by registered recyclers in the country accounted for 57% of the market and balance quantity was accounted by unregistered recyclers and most of the domestically produced scrap is not in the tax causing revenue loss to the government. According to ICAI, 23% of copper scrap consumed in the country was imported and 77% is from domestically generated scrap. Further, 24% copper downstream production comes from secondary market and India imported about 79 000 tons of copper scrap (excluding copper alloy based scrap) sourced from 97 countries and growth year-on-year is about 75%.
FIMI pointed out that China has put restriction on import and usage of copper scrap and this has resulted in scrap getting diverted to India given latter’s slack controls of importing and processing of scrap in the country.