Import duty leaves India’s scrap industry ‘bleeding’

India – The Metal Recycling Association of India (MRAI) has urged the country’s government to remove the import tax on steel scrap. Levied two years ago, the duty is having a damaging effect on the business, it was stressed at the organisation’s second international conference held last week in Mumbai.

India has signed free trade agreements with a number of countries. But whereas semi-finished products can be imported duty free into the country, there is a 5% import duty on steel scrap. India is the only country in the world to have such an import tax and, as a consequence, recyclers are struggling with profitability. ‘Many recycling operations are bleeding,’ confirmed MRAI’s president Ikbal Nathani of the Nathani Group of Companies.

And according to a Frost & Sullivan report, Indian steelmakers are losing substantial export business to competitors such as China and Taiwan as a result of the import duty. Government intervention to remove the duty will reduce the cost of secondary steel production, recyclers say.

India’s annual scrap consumption is 20.4 million tonnes while its imports amount to 6.5 million tonnes per year, making it the world’s third-largest importer of scrap. India’s metal recycling industry has the potential to grow 11.4% per year until 2020 – but only once the import duty and other free trade hurdles have been removed, it is argued.

India’s minister of state for steel Vishu Deo Sai, who attended the MRAI conference as a special guest, confirmed to Recycling International that he will do his ‘utmost to help save’ the country’s metal recycling industry. He promised recyclers that he will ‘recommend’ removal of the 5% import tax to the Indian government, which will shortly settle its new financial budget.