Engineering exporters' body EEPC India Tuesday urged the government to introduce copper scrap policy to prevent import of inferior quality material and said the shut down of Sterlite Copper's Tuticorin plant led to over 60 per cent fall in exports of copper and copper products in March.
According to EEPC India, the export of copper and copper products fell 60.8 per cent on year to USD 127.43 million (about Rs 879 crore) in March this year, while it declined 69.4 per cent to USD 1065.22 million (about Rs 7,348 crore) in 2018-19 as against the previous fiscal.
The government should develop internationally compatible standards and bring a copper scrap policy like for steel scrap to prevent the import of inferior quality and hazardous copper scrap, the body said in a statement.
The domestic refined copper production has fallen significantly during the first half of 2018-19 mainly due to the shutdown of 400 KT Tuticorin smelter of Sterlite Copper which accounted for 40 per cent of the country's copper smelting capacity, EEPC India said.
Recently, the Supreme Court refused to allow Vedanta to reopen Sterlite Copper's Tuticorin plant. Therefore, in this context, EEPC India feels that the trend in exports of copper will continue, the body noted.
"The duty on the copper concentrate is presently 2.5 per cent while the finished goods are coming at zero duty. Thus, there is a situation of inverted duty structure. Government could consider removal of this duty in order to help the industry becoming globally competitive," EEPC India Chairman Ravi Sehgal said.
The body also raised concern over the US decision to withdraw India's name from the Generalised System of Preferences (GSP) programme on March 5.
"Withdrawal of GSP will definitely have adverse impact on the products (833 engineering products out of 1,900 total products) exported from India under GSP programme which are mostly manufactured by Indian MSMEs," the body said.
It observed that Indian engineering exports are already going through a tough time because of high input costs, issues with GST, lack of finance for MSMEs and sluggish global economies, among others.
"But for March, engineering exports also in recent months have been faltering. In this context, the sudden withdrawal of GSP by the US will be detrimental for Indian exporting community. The government should provide some fiscal support for affected products especially for the labour intensive MSME sector," the council said.
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