Domestic Copper Sector Faces Strain as Industry Warns Against Zero-Duty Imports Under FTAs

Cheap copper imports under various free trade agreements (FTAs) are significantly harming India’s domestic manufacturing sector, according to the Indian Primary Copper Producers Association (IPCPA). The association has called on the government to implement safeguard duties and quantitative restrictions to protect local industries. With over ₹20,000 crore invested in recent years to achieve self-sufficiency, the IPCPA warns that the influx of zero-duty copper imports is undermining India’s smelting and downstream manufacturing capabilities.

Impact of Zero-Duty Imports

The IPCPA has expressed serious concerns regarding the impact of zero-duty copper imports from FTA partners. They argue that these imports are severely damaging India’s smelting and refining industries. The association is advocating for a 3% safeguard duty on specific copper imports, irrespective of their FTA status. This proposed duty would apply to copper cathodes, rods, wires, and tubes. The IPCPA emphasizes the urgent need for government intervention to address the challenges posed by FTAs, which they believe are detrimental to the domestic copper industry.

Concerns Over Trade Agreements

One of the key agreements raising alarm is the India–UAE Comprehensive Economic Partnership Agreement (CEPA). Under this agreement, customs duties on copper wire rods are set to decrease to 1% by FY26 and will be completely eliminated by FY27. The IPCPA has pointed out that the inflated tariff rate quota (TRQ) of 85,000 tonnes per annum (KTPA) is significantly higher than the intended 29 KTPA. This discrepancy has led to a staggering 340% increase in copper imports from the UAE between FY22 and FY26. The association is calling for a correction of the TRQ to align it with its original limits.

Challenges from ASEAN Agreements

The IPCPA has also raised issues regarding the India–ASEAN CEPA, which includes a cumulative value-addition rule. This rule allows Indonesian copper cathodes to undergo minimal processing in countries like Thailand, Malaysia, or Vietnam before entering India duty-free. Between 2020 and 2024, this provision has resulted in a 66% increase in copper wire imports and a 103% rise in copper tube imports. As Indonesia expands its smelting capacity, the competition for Indian producers intensifies, further complicating the market dynamics.

Global Market Pressures

The global copper smelting industry is currently facing severe challenges, with Treatment and Refining Charges (TC/RC) plummeting by nearly 80%. Projections indicate that TC/RC levels could drop to zero by 2026, jeopardizing the viability of smelting and refining operations in India. The IPCPA highlights that the influx of zero-duty imports from the UAE, ASEAN, and Japan under various FTAs is displacing domestic production. The association is urging the government to take decisive action to safeguard the interests of the Indian copper industry and ensure its sustainability in the face of these mounting pressures.

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