The Hindu Business Line : New import policy to hit metal scrap

As per the new import policy 2006-07, imports of non-ferrous metal scrap would be allowed only from overseas suppliers who are registered with the Directorate General of Foreign Trade (DGFT) before April 30. Also, imports would be only from registered suppliers against letter of credit. No high seas sale would be allowed.

"The new restrictions have been imposed to clamp down further on the importing of hazardous wastes," a local scrap dealer said.

Imports under the old rules of obtaining a pre-shipment inspection certificate will continue until June 30, but thereafter, no supplies can come from any companies, which have not registered with DGFT, he said.

Restriction of trade

"Procedure for registration for importers with DGFT is still reasonable, but registration for foreign supplier before April 30 will lead to restriction of trade with limited people," said Mr Surendra Mardia, Senior Vice-President, Bombay Metal Exchange.

The country imports roughly 30 lakh tonnes per annum of metallic scrap, according to trade sources. "The new measures will increase import costs of scrap and will make scrap more costly as import trading will take place only through Letter of Credit basis and not cash against documents or on high seas basis," a scrap importer said.

"Most of the small and medium units do not have bank facilities or limits and some of them are fully dependent on the mediator and in that case stoppage of high seas sale will create big problems for the small units," Mr Mardia said.

There is heavy competition in the international market and putting all these hurdles will definitely increase the cost of raw material, he said.

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