Value addition norm hits Indian copper producers
Wednesday, 13 January 2010
AHMEDABAD, Jan 12 (Commodity Online): India's copper producers have opposed the value addition norms of the government and demanded a change in the export-import policy.
The industry imports raw copper and exports finished products. As per the norm fixed by the government, unless the exporters achieve 15 per cent value addition, they cannot import material of the same value for their exports. Simply put, exporters cannot import goods worth more than Rs 85 if their exports are worth Rs 100. But, if there is value addition in the finished products, they can import raw material up to Rs 100, a value equal to their exports.
Faced with rising prices of raw copper in the international market, exporters are finding it tough to meet 15 per cent value-addition norm. Dealing in copper winding wires, enamelled wires, busbar wires and other products, they say they are unable to achieve value addition and are hence unable to import in the desired quantities. Subsequently, there is a loss of big chunk of revenues. Earlier on August 27, 2009, the government had issued notification to encourage value addition in manufactured exports and had stipulated a minimum 15 per cent value addition on imported inputs under advance authorisation scheme.
The players say that 98 per cent of the final product is copper. For such high per centage, value addition is difficult to incorporate.
The industry imports raw copper and exports finished products. As per the norm fixed by the government, unless the exporters achieve 15 per cent value addition, they cannot import material of the same value for their exports. Simply put, exporters cannot import goods worth more than Rs 85 if their exports are worth Rs 100. But, if there is value addition in the finished products, they can import raw material up to Rs 100, a value equal to their exports.
Faced with rising prices of raw copper in the international market, exporters are finding it tough to meet 15 per cent value-addition norm. Dealing in copper winding wires, enamelled wires, busbar wires and other products, they say they are unable to achieve value addition and are hence unable to import in the desired quantities. Subsequently, there is a loss of big chunk of revenues. Earlier on August 27, 2009, the government had issued notification to encourage value addition in manufactured exports and had stipulated a minimum 15 per cent value addition on imported inputs under advance authorisation scheme.
The players say that 98 per cent of the final product is copper. For such high per centage, value addition is difficult to incorporate.