Bombay metal bourse seeks duty cut

The Bombay Metal Exchange (BME) would like the government to reduce import duty on raw materials for the copper industry to 10 per cent from the existing 20 per cent so that small-scale manufacturers can restructure and become competitive.

"The central government has reduced the customs duty on air conditioner and refrigerator components, from 20 per cent to 10 per cent for copper cathodes and from 20 per cent to 15 per cent for copper wire bars. However, for all other related industries the customs duty on copper scrap stands at 20 per cent," Ashok Bafna, president of BME, said at the annual general meeting.

Besides, Indian companies have purchased copper mines abroad as a part of their global strategy and were now in a position to import copper ore at five per cent duty. Other manufacturers have to import scrap at 20 per cent.

"BME is pushing to keep the duty differential between the raw materials and finished imports at five per cent to 10 per cent," said Bafna.

Small and medium scale units were unable to compete in the market as the import duty regime made finished imports cheaper than Indian products.

The government-owned Hindustan Copper, with installed capacity of 50,000 tonnes per annum (tpa), was up for divestment. A secondary producer of copper, SWIL, was also expected to start production soon with initial capacity of 50,000tpa.

This would lead to a glut in the market. Production of copper in India was 374,000 tonne per annum, but consumption was only about 290,000 tonne. The surplus was being exported, Bafna said.