Domestic copper industry has urged the government to protect it from the annual USD 1 billion imports of the metal from Japan and ASEAN countries, with which India has inked market opening trade pacts.
Hit by the rising imports, industry body Indian Primary Copper Producers Association (IPCPA) has approached Cabinet Secretary P K Sinha requesting him to consider reviewing the Free Trade Agreements (FTAs) with Japan and ASEAN countries, among other measures.
“Copper prices are around USD 5,000 a tonne and with 2 LT of imports, the hit is around USD 1 billion annually. We met Cabinet Secretary and drew his attention towards industry’s plight,” IPCPA Vice President R Ramnath told PTI.
Indian manufacturers are losing share in the domestic market due to rising imports of refined copper products. They nearly constitute one-third of the market rising at alarming CAGR of 22 per cent over the last 5 years, he added.
Every year, India consumes around 6.7 lakh tonnes (LT) of copper, an important industrial metal that is used in power and telecom, consumer durables as well as electrical goods, of which imports alone account for one-third or roughly 2 LT, he said.
However, “they (import) is expected to cross 2.5 LT mark in 2016-17,” he said.
IPCPA constitutes state-run Hindustan Copper Ltd, Anil Agarwal-led Vedanta Ltd and Aditya Birla Group’s Hindalco, which account for 100 per cent copper production in the country.
India, with a total copper production capacity of 10 LT, produces about 7.9 LT of the metal of which 4.6 is consumed in the country, while 3.5 LT is exported mainly to China.
“In the last 20 years, copper firms have invested a total of around Rs 30,000 crore in the sector that now is in the red due to imports, which are eating up into the companies’ sales and profits. This needs to be checked,” Ramnath, who is CEO of Vedanta’s Copper business rued.
IPCPA has requested the government to revisit the FTA’s pending for review — with ASEAN nations (in 2016) and with Japan (in 2017), he said.
FTA or Comprehensive Economic Cooperation Agreement (CECA) seeks to liberalise trade and services regime besides removing non-tariff barriers and encouraging investments.
“We have also urged for increasing custom duty on copper products from 5 per cent to 7.5, the reinstatement of export incentives and reducing duty on copper concentrates to nil from 2.5 per cent at present,” Ramnath added.
The industry employs around 50,000 people directly and indirectly and has contributed Rs 34,000 crore in the last three years through exports. Besides it serves more than 800 small and medium enterprises, he said.
“Rise in imports will impact firms, which in turn will affect India’s balance of trade with China as India exports around USD 2 billion worth of copper products to the People’s Republic — constituting 15-20 per cent of the total outbound shipments to the Communist nation,” Ramnath added.