Engineering goods exporters have sought removal of customs duty on copper ores and concentrates from the present 2.5 per cent so that they have the option of importing it from countries other than Chile and Indonesia that enjoy zero duty on these minerals because of existing trade agreements with India.
The Engineering Export Promotion Council of India (EEPC), in its Budget representation, has also sought removal of customs duty exemption on items used in manufacture of refrigerator compressor, overload protectors and atmospheric geysers to boost demand for local products.
Copper concentrate imports
Due to limited copper ore reserves, Indian copper industry relies on imports of copper concentrate from Chile and Indonesia, enjoying nil duty under India-Chile Preferential Trade Agreement and India-ASEAN Free Trage Agreement respectively, according to the submission.
“A higher duty rate compels import of copper ores and concentrates through preferential route whereas if the duty is reduced to zero, Indian industry will be able to explore options other than Chile and Indonesia for sourcing copper concentrate removing the existing high market concentration,” the statement pointed out.
Developed nations such as Japan, are encouraging import of ores and concentrates at zero duties as these are the reserves/wealth of the nation, the statement further said. “Since Japan has minimal/negligible reserves of copper ores and concentrates, yet they are major exporters of the copper cathodes to India which cannot be manufactured without the availability of copper ores and concentrates at a competitive price,” it said.
Impetus to manufacturing
If India reduces customs duty on copper ores and concentrates to zero per cent for all countries, it would lead to ample availability of the ores at competitive price in the domestic market giving an impetus to manufacturing of downstream products, ultimately resulting in growth of exports of these items, the statement added.
On its proposal for removal of customs duty exemption on specific engineering goods manufactured in India, some of which are inputs for electronic products, EEPC argued that it will not only boost domestic production but also result in higher revenue generation for the government.