Import duty on metal scrap batters recyclers in India

23 Aug 2013 Last updated at 03:35:04 GMT 
 
MUMBAI (Scrap Monster) : The re-instating of import levy on scrap metal imports to the country by the Indian government has created unrest among the metal recyclers in the country. The imposition of duty has left many of them on the verge of closure.

Recently, the Indian government had issued customs notification imposing an import levy of 2.5% on aluminium, ferrous and stainless steel scrap. In a separate notification, the government also had imposed 4% special additional duty of customs (SAD) on brass scrap imports.

India is the only country in the Southeast Asian region to have imposed import duty on scrap metals. According to the Metal Recycling Association of India, the move by the Indian government will only help to hinder the use of metal scrap by the country. Also, the domestic metal recyclers may find it extremely difficult to face the mounting competition from semi-finished producers in other ASEAN countries where raw material imports are duty-free.

In India, domestic scrap collection is still dominated by informal sector. According to statistics, the country imports nearly 7.5 million tonnes of scrap every year. The 4500 around metal recyclers, who depend on the imported raw material to produce castings, would be left with no option but to close down their business. Such an action by metal recyclers will in effect result in India losing its US$ 100 billion vehicle and vehicle components market to China and Thailand.

Meanwhile, the Metal Recycling Association of India (MRAI) has requested the government to take immediate action to abolish the import duty. The government is reported to be looking into the matter quite seriously.

Author: Paul Ploumis