Industry body seeks higher duty on copper used in solar module
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The Indian Primary Copper Producers Association has urged the government to raise customs duties on solar copper products. They recommend increasing the duty on solar PV ribbon and busbars from 5% to 10%. The association also requests maintaining existing duties on refined copper and copper pipes. Domestic production is underutilized due to imports from China affecting the market.
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Loading...×MUMBAI: A domestic copper producers association has sought an increase in customs duty on copper products used in solar modules, while retaining the existing duty on certain other products.The Indian Primary Copper Producers Association (IPCPA), in its pre-Budget representation letter last week, requested retaining the 5% basic customs duty on refined copper and semis products, and a 7.5% duty on copper pipes and tubes without any exemption or concession for countries under Free Trade Agreements. ET has reviewed a copy of the letter.
The industry body is also seeking a doubling in the basic customs duty on solar photovoltaic (PV) ribbon and busbars to 10% from 5% currently. While India has a 30,000-tonne capacity for these products as against an annual demand of around 25,000–28,000 tonnes, plants are underutilised because of imports from China, the association said.
“Industry plans further capacity; a 10% duty would lift utilisation, draw fresh investment and cut import dependence in the solar value chain,” IPCPA said. Hindustan Copper, Hindalco Industries, Sterlite Copper and Adani Group-owned Kutch Copper are members of the association.
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Weak treatment and refining charges (TC/RC) margins and the pressure from imports are already hurting the Rs 30,000 crore that the industry has invested in the last three decades, the body said. Likely investments of around Rs 35,000 crore to increase capacity in the next few years could also be impacted unless duties are steady. “Any signal of a cut would make it uncommittable,” IPCPA said.
Imports of copper has risen to nearly 500,000 tonnes in 2025 from 280,000 tonnes in 2020. Considering that some economies such as US are closing their markets while others like Indonesia are commissioning new smelting capacities, surplus copper is likely to find its way to open markets such as India, it said.
Margins
Copper smelters generally earn through processing fees charged to miners, also known as TC/RCs.The sharp fall in these margins over the last decade means that Indian smelters are instead paying miners to take concentrate for processing, the association said; Indian smelters also have a financing-cost disadvantage compared to Japanese and Korean smelters.
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“The 5% (basic customs duty) is the only margin left in the business. There is no headroom from which a duty cut could be absorbed,” IPCPA said. In September, the association was in talks with the government to lower GST rates on a range of copper products to 5% from 18% currently.
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Figures reflect the source report and its stated period. This article is for information and is not investment advice.
