Indian mining body seeks higher import tax on aluminium, zinc, copper products

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India's top mining industry body has sought higher import taxes on a slew of metals such as zinc, copper and aluminium to help halt the tide of cheaper imports, especially from China, according to a note sent to the government and seen by Reuters.

The government should raise import taxes to 10%-15% on several aluminium products, including scrap to 10% from 2.5%, the Federation of Indian Mineral Industries (FIMI) said in the note addressed to India's Ministry of Finance.

India's aluminium producers are expected to raise their combined production capacity to 4.6 million tonnes in the next two years, up from 4.1 million tonnes now.

India is the world's third-biggest primary aluminium producer.

During the current fiscal year to March 2023, India's aluminium demand is expected at 4.2 million tonnes, and the country imported 2.3 million tonnes of aluminium in the previous fiscal year, largely driven by cheaper imports.

"The major threat of imports is from China, which constitutes over 85% share of downstream aluminium imports," according to the FIMI note sent to the finance ministry as it prepares 2023/24 federal budget due to be announced in February.

The note also said most metal scrap imports were coming from Britain, Saudi Arabia, the United States, and the United Arab Emirates.

The FIMI also urged government to raise import taxes on intermediate and finished goods of copper and zinc ingots to 7.5% from 5%.

"Low-quality copper scraps are being imported in large quantities by traders/importers into India these days, following the Chinese and Malaysian ban on scrap imports into their respective countries," FIMI said.

India's primary copper refining capacity of around 1 million tonne was sufficient to meet domestic demand, it said. And India's primary zinc production of 700,000 tonne is higher than the country's consumption of 650,000 tonnes, FIMI said.

FIMI also reiterated its demand to scrap an export tax on low-grade iron ore lumps and fines – with iron content below 58%. The tax was raised to 50% from zero in May.