India’s top mining industry federation is seeking higher import taxes on metals such as zinc, copper and aluminum to help halt a tide of cheaper imports, especially from China, according to a note it sent to the government and seen by Reuters.
The government should raise import taxes to 10%-15% on several aluminum products, including scrap to 10% from 2.5%, the Federation of Indian Mineral Industries (FIMI) said in the note addressed to the Ministry of Finance. The federation provided Reuters with summary of its points in the note.
India’s aluminum producers are expected to raise their combined production capacity to 4.6 million tonnes in the next two years, up from 4.1 million tonnes now.
India is the world’s third-biggest primary aluminum producer.
During the fiscal year to March 2023, India’s aluminum demand is expected to reach 4.2 million tonnes. It imported 2.3 million tonnes of aluminum in the previous fiscal year, much of that supply cheap imports.
“The major threat of imports is from China, which constitutes over 85% share of downstream aluminum imports,” the FIMI said in the note to the finance ministry as it prepares 2023/24 federal budget due to be announced in February.
The federation said most metal scrap imports were coming from Britain, Saudi Arabia, the United States, and the United Arab Emirates.
Separately, Satish Pai, managing director of major aluminum producer Hindalco Industries Ltd, said it was also concerned about cheap Chinese imports.
“We should be careful not to allow the Chinese to dump into India just because their economy is in trouble,” Pai told reporters in a post-results media briefing.
The FIMI also urged government to raise import taxes on intermediate and finished goods of copper and zinc ingots to 7.5% from 5%.
“Low-quality copper scraps are being imported in large quantities by traders/importers into India these days, following the Chinese and Malaysian ban on scrap imports into their respective countries,” the FIMI said.
India’s primary copper refining capacity of about 1 million tonne was sufficient to meet domestic demand, it said. And India’s primary zinc production of 700,000 tonne is higher than the country’s consumption of 650,000 tonnes, FIMI said.
FIMI also reiterated its demand to scrap an export tax on low-grade iron ore lumps and fines – with iron content below 58%. The tax was raised to 50% from zero in May.
(By Neha Arora; Editing by Mayank Bhardwaj and Simon Cameron-Moore)