Small and micro copper manufacturers in the country complain that their operation was unsustainable because of high import duty for raw material and less duty for finished products.
Owing to a mere 12.3 per cent import duty on imported finished products, they are facing competition from imports. On the other hand, they have to pay 22.85 per cent duty on import of raw materials, industry body Bombay Metal Exchange (BME) complains.
The import of finished products from neighbouring countries, including Sri Lanka, Myanmar, Bangladesh and Vietnam, is cheaper than paying high duty to import raw materials directly.
This has affected about 5,000 small and medium copper smelters that produce brass artifacts and utensils, reports suggest.
The 22.85 per cent import duty on raw material consists of 12.3 per cent countervailing duty, four per cent special additional duty (SAD) and a host of other duties on copper and brass scrap.
On the other hand, the government has signed free trade agreements (FTAs) with many neighbouring countries and has allowed the import of finished products under preferential duty benefits.
Further, most processing units are borrowing working capital from banks at high interest rates. Non-ferrous metals are usually characterised as high-value and high-investment products that provide large-scale employment.