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  1. Beleaguered Hindalco, Vedanta, Hindustan Copper demand hike in import duty to 7.5 %

Beleaguered Hindalco, Vedanta, Hindustan Copper demand hike in import duty to 7.5 %

The industry has requested the government to reinstate the export incentive in phased manner. For the first six months, it should be retained at the 2% level and then at 1.5% level in the next fiscal and at 1% for the subsequent two financial years.

By: | New Delhi | Updated: September 6, 2016 6:34 AM
Copper.l.reu Ramnath said imports are growing at an alarming rate of over 20% for the last five years. Imports have risen from 93,000 tonne in 2011-12 to 2.06 LT last fiscal. (Reuters)

Like steel and aluminium, the country’s copper sector is also facing import blues. In a recent meeting with the government, country’s top copper producers — Hindalco, Vedanta and Hindustan Copper — have demanded that import duty on the finished copper products be raised to 7.5% from 5% now in order to ensure a level-playing field to them.

They also want 2.5% import duty on copper concentrate, the raw material that they need to entirely import to produce finished products, to be brought down to nil and the revival of the 2% export incentive, which withdrawn with effect from April 1.

“We have made presentations to various departments in the government. Recently, we met Cabinet secretary also where officials from other departments, including mining and commerce, were present. We have urged that the prevailing inverted duty structure should go,” said P Ramnath, vice-president, Indian Primary Copper Producers Association (IPCPA).

Copper

Last fiscal, India consumed 6.7 lakh tonne (LT) copper, 31% of which was fed by imports. Ramnath said imports are growing at an alarming rate of over 20% for the last five years. Imports have risen from 93,000 tonne in 2011-12 to 2.06 LT last fiscal. Ramnath, who is also the chief executive officer of Vedanta’s Sterlite Copper, said imports are likely to go up beyond 2.5 LT in the current fiscal.

Though the installed capacity of domestic firms is at around 10 LT, their capacity utilisation was 80%. Indian firms exported 45% of their production, primarily to China, in 2015-16.”We are already at an disadvantageous position and losing in competition from Japan and other countries in Asean because of their various advantages including different tax incentives. There is a need to review the free trade pacts with these countries,” Ramnath said.

Asean countries and Japan cumulative account for around 40% of the total imports to India. Industry data showed imports from Asean countries have grown at a CAGR of 120% over the last six years while for Japan, the CAGR is 109% during the same period. Asean countries enjoy 1% duty concessions against MFN duty of 5%. Imports from Japan attract 2.27% duty which is going to become 1.82% from April 2017 onwards and nil from April, 2012 under the free trade pact.

The industry has requested the government to reinstate the export incentive in phased manner. For the first six months, it should be retained at the 2% level and then at 1.5% level in the next fiscal and at 1% for the subsequent two financial years.

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