NEW DELHI | Jun 07, 2016: Indian copper majors have demanded abolition of duty on imported raw material and restoration of export duty incentives as their capacities lie underutilised.

Hindalco Industries, Hindustan Copper and Vedanta have asked the government to remove the current import duty of 2.5% on copper concentrate.

"The industry is dependent on imports as only 4% reserves are available in India whose rights vest with state-owned Hindustan Copper Ltd, while rest 96% is imported, Hindalco Group Executive President, Head (Copper Business) JC Laddha said.

The mines ministry has recommended to the revenue department to abolish the duty, Mines Secretary Balvinder Singh told ET.

The three companies have a combined annual capacity to produce one million tonnes. The capacities are underutilised by about 22% as copper imports from Japan and Asean firms have increased, he said.

India's consumption of copper is at 6.25 lakh tonne while imports are around 4 lakh tonne. India's Free Trade Agreements (FTAs) with Japan and Asean countries allow imports of finished products at lesser duty, giving rise to an inverted duty structure. The inverted duty structure incentivises imports of finished goods rather than imports of raw material for local manufacturing, Sterlite Copper Chief Executive Officer P Ramnath said.

The condition is set to worsen further with the customs duty on imports is set to be zero by 2021 from 2.73% now for Japan and Asean countries and India is negotiating FTAs with Russia and UAE.

(Source: http://economictimes.indiatimes.com/)