The copper industry has finally got respite after a grueling two-year period with the authorities.Monday's budget by finance minister, Yashwant Sinha, has addressed this long pending issue through insertion of differential duty structure for the import of finished copper products and raw materials.Unwrought copper (raw material) will attract 30 per cent duty while the duty on finished product, wrought copper will be 35 per cent. The across-the-board import duty levy of eight per cent, effectively translates into a eight-per cent hike for raw materials and 13 per cent for finished products.The duty differential, abolished in 1996-1997, put the Indian industry under severe stress which led to enormous losses. The Indian industry had to compete with international producers on various counts including higher interest rates, higher power tariffs, high scale of economies internationally and high state and other local levies. The net effect of these resulted into a switch over to imported finished productswhich in turn put local manufacturers of sheets, tubes, strips, foils, forgings etc. at a disadvantage.Many medium and small-scale units shut down to avoid further losses and a few also trimmed staff to cut losses. The Raja Chelliah Committee had suggested a differential duty structure on copper products to remove the anomalies faced by the domestic industry vis-a-vis international suppliers way back in the early 90's. But the recommendations were never taken seriously by the succeeding governments.Internationally, the practice is to have a graded system of customs duty on different forms of the same items to guard against dumping.With Sinha's measures, the industry has got some breathing time though the difference in the duty structure is not at the desired level. However, the measures, though a step in the right direction, needs fine-tuning and this can be done if the government gives some serious thought to Chelliah Committee recommendations, industry experts feel.
