In­dia raises im­port tax on Alu­minum, Zinc to curb China sup­plies

The Pak Banker - - BUSINESS -

MUM­BAI: In­dia will in­crease taxes on im­ports of alu­minum to curb cheap sup­plies that have poured in mainly from China, seek­ing to pro­tect lo­cal me­tals pro­duc­ers. The duty on pri­mary alu­minum will be in­creased to 7.5 per­cent from 5 per­cent, ac­cord­ing to the bud­get doc­u­ment for the fi­nan­cial year start­ing April 1 re­leased on Mon­day. The tar­iff on other alu­minum prod­ucts will be boosted to 10 per­cent from 7.5 per­cent while the tar­iff on zinc al­loys will be in­creased to 7.5 per­cent from 5 per­cent, it said.

A slow­down in China's econ­omy has led to a surge in me­tals from alu­minum to zinc flood­ing world mar­kets, trig­ger­ing a rise in trade ten­sions from the U.S. to Asia. In­dia's Mines Sec­re­tary Balvin­der Ku­mar said ear­lier this month that the surge in im­ports of alu­minum re­mained the big­gest worry and the coun­try was con­sid­er­ing a safe­guard tax. "This is some­thing good but not sig­nif­i­cant enough for the in­dus­try," Abhijit Pati, chief ex­ec­u­tive of­fi­cer of Vedanta Ltd.'s alu­minum op­er­a­tions, said by phone. "We are still work­ing on a safe­guard tax and other mea­sures."

Vedanta closed 1.7 per­cent lower at 70.60 ru­pees in Mum­bai, eras­ing in­tra­day gains of as much as 6.9 per­cent, Hin­dalco In­dus­tries Ltd. ended 1 per­cent lower at 68.75 ru­pees, while Na­tional Alu­minium Co. slid 1.2 per­cent to 32.90 ru­pees. The bench­mark S&P BSE Sen­sex in­dex dropped 0.7 per­cent.

In­dia's alu­minum im­ports rose 4.5 per­cent to 1.13 mil­lion met­ric tons in the eight months through Novem­ber, ac­cord­ing to data from the Di­rec­torate Gen­eral of Com­mer­cial In­tel­li­gence and Sta­tis­tics. The in­dus­try is dis­ap­pointed by the govern­ment's pro­posal to dou­ble the clean-en­ergy tax on coal to 400 ru­pees a ton to fight en­vi­ron­men­tal pol­lu­tion as it will make the fuel costlier for metal pro­duc­ers, Vedanta's Pati said.

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