Metal scrap recyclers allege closure threat

The estimated 3,500 units in the country which recycle nonferrous metal scrap are worried at the central government’s proposal to quadruple import duty on it.

Employing around a million workers, directly and indirectly, these are largely in the unorganised sector. Processing around 2.5 million tonnes of such scrap annually, these units produce metal components, foundry and forging products for use in a number of industrial and household applications. Termed secondary metal, the automobile sector is a major user.

These units have gradually overcome the transitional phase of shifting from non-taxed units to the goods and services tax regime, the required system now in place.

“The government is considering raising import duty to 7.510 per cent, from the existing 2.5 per cent. In fact, primary metal producers in India do not want secondary metal producers to exist. Hence, they have moved the government for this abnormal rise in duty on metallic scrap, the only raw material for secondary metal production. The same companies, however, promote recycling overseas,” says Kishore Rajpurohit, director, Metal Recycling Association of India and managing director of SFC Metallurgical, an Ahmedabad-based recycler.

Recycling of aluminium and copper scrap, say segment representiatives, saves up to 95 per cent in energy and cuts release of obnoxious gases bu up to 90 per cent. And, since the raw material is imported, promotiong of such recycling conserves resources here.

“Secondary metals are also 20-25 per cent cheaper than primary ones. Being a cheaper substitute, producers of primary metals don’t want consumers to receive articles made from secondary producers. But, this aim is at the cost of thousands of small scale units and their dependents,” says Mohan Agarwal, managing director at Century Metal Recycling, reportedly Asia’s largest recycler of aluminum, copper and zinc scrap.