Cheap copper imports under FTAs threaten domestic manufacturing, industry body warns

India’s primary copper producers have sounded the alarm over a surge in cheap imports, urging the government to impose safeguard duties to protect domestic manufacturing from what they term “severe damage” caused by zero-duty shipments under Free Trade Agreements (FTAs).

The Indian Primary Copper Producers Association (IPCPA) stated on Monday that an influx of copper products, particularly from the United Arab Emirates (UAE), is undermining the viability of local smelters. The industry body noted that despite investments exceeding ₹20,000 crore in recent years to boost capacity, domestic players are losing market share to duty-free imports.

Call for 3% safeguard duty To stabilize the market, the IPCPA has formally requested the imposition of a 3% safeguard duty on specific copper categories, applicable regardless of FTA status. Additionally, the association recommended quantitative restrictions (quotas) on inbound shipments to curb the volume of imports flooding the market.

UAE trade pact scrutiny The association specifically flagged the India-UAE Comprehensive Economic Partnership Agreement (CEPA) as a pain point. Under the current CEPA terms, customs duties on copper wire rods have dropped to just 1% in FY26 and are scheduled to be phased out entirely by FY27.

Compounding the issue is a discrepancy in the Tariff Rate Quota (TRQ). According to IPCPA, the TRQ was effectively inflated to 85,000 tonnes per annum (KTPA), far exceeding the originally intended limit of 29 KTPA. This loophole has triggered a 340% surge in copper imports from the UAE between FY22 and FY26, eroding the competitiveness of Indian smelters.

The industry body warned that without an immediate correction to the TRQ limit and the imposition of safeguards, India risks stalling its march toward self-reliance in critical metals.

Summary

The Indian Primary Copper Producers Association (IPCPA) has warned that cheap copper imports, particularly duty-free shipments from the UAE under CEPA, are damaging domestic manufacturing. Citing a 340% surge in UAE imports, the body has urged the government to impose a 3% safeguard duty and correct inflated import quotas to protect local investments worth ₹20,000 crore.

FAQs

Q1: Why are copper imports hurting Indian producers? 

Zero-duty imports under Free Trade Agreements (FTAs) make foreign copper cheaper than locally produced metal. This undercuts domestic smelters who have invested billions to build capacity, leading to idle plants and financial stress.

Q2: What is the issue with the UAE trade deal (CEPA)? 

Under the India-UAE CEPA, duties on copper wire rods have fallen to nearly zero (1% in FY26, 0% in FY27). Additionally, an inflated import quota (TRQ) allows excessive volumes to enter India duty-free, causing a 340% spike in imports.

Q3: What is a Tariff Rate Quota (TRQ)? 

A TRQ allows a specific quantity of a product to be imported at a lower or zero duty rate. The industry claims the copper TRQ was set too high (85 KTPA instead of 29 KTPA), allowing too much cheap copper to flood the market.

Q4: What solution is the industry proposing? 

The IPCPA wants the government to impose a flat 3% safeguard duty on all copper imports, regardless of FTAs, and to implement strict quantitative limits (quotas) on how much can be imported.

Q5: How much has the industry invested? 

Indian companies have invested over ₹20,000 crore in recent years to expand copper smelting and downstream manufacturing capacity, aiming for self-reliance (Atmanirbhar Bharat).