In a welcome move, import duty on ferrous scrap was removed in the Indian budget presented on 01 Feb’21. The duty, that had been set at 2.5%, has been exempted up to 31st Mar’22.
Also, a voluntary vehicle scrapping policy has been announced, to phase out old and unfit vehicles. Vehicles would undergo fitness tests in automated fitness centres after 20 years in case of personal vehicles, and after 15 years in case of commercial vehicles.
Mr. Sanjay Mehta (Director MTC Group & President Material Recycling Association of India (MRAI)) while expressing his gratitude to the government on the exemption of 2.5% customs duty and the voluntary vehicle scrapping policy said that this will give a boost to India’s recycling industry. He was speaking in a webinar on post-budget analysis.
“We are extremely delighted with the Indian Govt’s consideration of removing 2.5% import duty on ferrous scrap. This is expected to bring down the landed cost of imports roughly by around $8-10/t which will surely help us in competing with other neighbouring scrap importing nations like – Pakistan and Bangladesh”, said Mr Zain Nathani, Vice President MRAI.
“Also, Voluntary Vehicle scrappage Policy has been announced for private and commercial vehicles. MRAI should now strive for getting incentives linked to vehicle scrappage policy,” he added.
India imports around 5-6 mn t of scrap annually. UAE has remained the prominent scrap export country to India followed by the other major suppliers like US, UK and South Africa.
Few market participants are of the opinion that there are chances of increase in imported scrap volumes in India (especially from Dubai due to shorter lead times) in the near term. However, market participants are awaiting clarity on price trends post-Chinese holidays.
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