International Copper Association of India calls for GST cut on copper scrap to formalise copper recycling sector

The International Copper Association India (ICA India) has called for the formalisation of India’s copper recycling sector as an immediate measure to improve the availability of high quality copper, a critical transition metal used across sectors including energy transition, construction and advanced manufacturing.

In an exclusive interview with Fortune India, Mayur Karmarkar, managing director, ICA India, said the country’s leading industrial groups are already making investments to establish such recycling capacities in the country, though they are not getting sufficient quantity of raw material as the scrap trade is unorganised to a large extent.

“The investments are coming in here, but the policy (high rate of GST on scrap copper) is not conducive at the moment”, he said. According to him, reduction in GST rate will automatically translate into formalization of the sector (due to reduction in tax evasion), which will also help to reduce some of the finance cost for the smelter and the refiner. Today we have around 600,000 tonnes of copper scrap, and most of it, which is around 60-70%, is traded in cash (in the informal sector). And the quality of the recycled copper is not at par with the refined product. So instead of re-melting this scrap itself, we need to recycle it properly in a responsible way so that the product is of the same quality of the refined product," Karmarkar said.

“Once we have more smelting and refining capacity, secondary smelting and refining capacity for scrap with the right technology, we will be producing the same grade cathode from the scrap instead of just having the cash business, re-melting bad-quality copper, which is also a concern for electrical applications," he adds.

The ICA India is keen to see copper and copper articles see GST on it getting reduced to 5% from the current 18% to make the trade transparent and in turn improve compliance.

India’s current copper demand is about 1.8 million tonnes. “Out of which our scrap is a sizable contributor compared to other countries. We have our own local scrap, which is around 600,000 tonnes, plus around 200,000 tonnes of imports overall," Karmarkar said.