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Indian recyclers hit hard by import levy

India – Recent scrap import duty changes in India represent a serious threat to 4500 metal recycling units across the subcontinent – with many facing closure, according to media reports.

In May this year, the Indian government imposed a 2.5% customs duty on imports of scrap iron, steel and aluminium and a 4% duty on imports of brass scrap. India is the only country in Asia to have introduced such import barriers on raw materials following four years of suspension; others in the region have freed up scrap import controls.

With the Indian rupee reaching record lows on an almost daily basis, scrap imports have become more expensive at a time of decreasing demand owing to the overall weakness in economic conditions.

The Metal Recycling Association of India (MRAI) has requested India’s prime minister Manmohan Singh to take action to provide them with a level playing field. ‘The prime minister assured us that he would look into the issue,’ says MRAI vice president (non-ferrous) Dhawal Shah.

India imports around 7.5 million tonnes of scrap annually. With domestic scrap collection dominated by the informal sector, metal recyclers depend on imports to produce 10 million tonnes of castings each year.

According to ‘The Economic Times’, India’s IIF smelter body has also opposed the 2.5% levy on imported scrap, warning it could hurt the domestic industry and result in India losing its US$ 100 billion vehicle and vehicle components market to China and Thailand.

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