Researchers from the Indian Institute of Foreign Trade (IIFT) have red flagged the import of finished copper products under Free Trade Agreements. To counter the trade balance, they have proposed to reinstate a 2 per cent export incentive on Copper Cathodes and Copper Rods for five years and also a National Sword Policy in India to restrict the imports of hazardous copper scraps.
“The production of refined copper has mostly increased at a diminishing rate in the recent years due to slowdown in Chinese demand which used to import a very high proportion of India’s refined copper exports,” the study said.
Commenting on the role of FTAs, the study by Rakesh Mohan Joshi, Biswajit Nag, Debashis Chakraborty said, “Imports in several finished copper products have been growing steadily and have become a major cause of concern. The issue has become more prominent after India signed Free Trade Agreements with ASEAN, Japan, South Korea and others, due to which finished products have started coming into India at reducing customs duty.”
According to the study, an ‘inverted duty structure’ has been formed, due to higher duty on the raw material that is copper concentrate which has to be imported, while zero or lower duties on many finished products such as refined copper wire (<=6mm), tubes and pipes, plates, sheets and strip among other.
This inverted duty structure and the arrival of ASEAN countries into the Indian final copper market has seriously hit the livelihood of several persons directly or indirectly employed in the copper industry due to the closure of units, the study said.
On the export front, the study notes that India’s exports of copper are dominated by only a few selected products and have either remained stagnant or have declined. “It is losing its footprint in the top importing nations for the different products and has not been able to tap into newer markets and export new copper products or even make its presence felt in its major FTA partners’ markets like Japan, SAARC and ASEAN among others,” the study said.