Indian copper producers have urged the government to reduce the indirect goods and services tax (GST) on copper products to 5% from 18%, arguing that the current rate locks up more than 490 billion rupees ($5.11 billion) in working capital.
The petition by Bharat Metal Exchange (BME) and copper producers including Hindalco Industries (NSE: HINDALCO), Vedanta Ltd (NSE: VEDL), billionaire Gautam Adani’s Kutch Copper Ltd and Hindustan Copper (NSE: HINDCOPPER) was sent to the GST Council, chaired by the federal finance minister, on September 22. The letter was shared by BME with Reuters.
“The current 18% GST rate immobilises critical working capital across an unusually long (four to five months) processing and conversion cycle,” the letter said.
The tax burden leaves little for procurement of raw materials and other business expenditures given rising copper prices, an official with BME said.
Copper producers have committed 440 billion rupees in capital expenditure by 2030 that would create an estimated 45,000 jobs, BME’s letter said.
Copper prices on the London Metal Exchange touched a record high of $14,875 a metric ton earlier this month.
India, which is the world’s second-biggest refined copper importer, may have to import 91% to 97% of its copper concentrates by 2047, according to the government.
The country’s copper imports rose 4% to 1.2 million metric tons in fiscal 2025. Demand is expected to climb to 3 million metric tons to 3.3 million metric tons by 2030 and 8.9 million metric tons to 9.8 million metric tons by 2047, the government has said.
($1 = 95.9250 Indian rupees)
(Reporting by Neha Arora; Editing by Diti Pujara)
