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Public sector Hindustan Copper, and private sector Hindalco Industries as well as Sesa Sterlite have joined hands to seek restoration of 2 per cent duty incentive on refined copper exports, which was removed this year.
Three copper producers forum – the Indian Primary Copper Producers Association -- has represented to the Union Ministry of Commerce for reinstatement of the incentive under merchandise Exports from India Scheme (MISE). The withdrawal of the incentive from April 1 this year has made the exports uncompetitive in the international market, the association has said.
According to the association estimates, the primary producers exported refined copper worth around $660 million during 2014-15. According to the Directorate General of Foreign Trade data, until 2014 December-end, copper exports from the country stood at $540 million.
Affected by low domestic demand, the copper refiners have already been using 80 per cent of the installed capacity 9.5 lakh tonnes. Moreover, an association spokesperson told Business Line that the Indian producers have been rapidly losing their share in the domestic market as imports in the last three years have grown from 85,000 tonnes to 1.66 lakh tonnes.
Industry insiders said that Indian refiners’ costs were higher as their plants were relatively older than their international competitors. The association also said that costs were higher owing to infrastructural inefficiencies, high cost of raw materials and interest compared with global markets. Higher cost of operations at the Indian ports and freight cost to the consuming market – mainly China -- relative to other competitors such as Japan, South Korea, Indonesia or Vietnam were also raising viability issue for exports.
The association said that in the last three years, Indian copper refiners have already lost the market for copper rods in South East Asia and West Asia. It apprehended that the withdrawal of duty incentive would lead to loss of the export market for refined copper too.
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