2.5% duty on metal scrap import to hit auto exports: Foundries.

NEW DELHI: The apex body of foundrymen - IIF has opposed a levy of 2.5 per cent duty on import of metal scrap, saying it would hurt the domestic industry and result in India losing its USD 100 billion auto and auto components market to China and Thailand.

"The 2.5 per cent duty imposed on import of metal scrap recently would adversely impact the Indian manufacturers while semi-finished and finished goods produced from scrap when exported from Thailand and Malaysia are allowed duty free," Institute of Indian Foundrymen (IIF), Chairman, Energy and Environment Committee G S Agarwala told PTI.

As a result, India's $100 billion export market in automobiles and auto components was already seen shifting to China and Thailand, he said.

Demanding immediate rollback of the 2.5 per cent duty on metal scrap, imposed in May, Agarwala said it was necessary to regain the lost export market in automobiles and auto components.

He added that foundry industry was poised to play a bigger role in industrial resurgence as it is the feeder industry supplying required castings to all other industries like automobile and auto component industry and others.

India's foundry production was about 9.5 million tonnes (MT) per annum compared to China's foundry production of about 41 MT.

"The big gap had helped China to achieve production of 17 million cars compared to India's production of only 3 million cars. It had also helped China to maintain a 6.6 per cent year-on-year increase in exports and to have a hefty trade surplus, while India was registering a negative growth in exports, leading to a huge current account deficit," he said.

For economic resurgence, it is essential to increase foundry production substantially from the present 9.5 MT to at least 30 MT in the next 5 years, he said, adding that the growth of the foundry industry is economically sustainable from the view point of conservation of energy and protection of environment.

In the case of automobile and auto components, automotive aluminium is produced by recycling aluminium scrap which requires only 5 per cent of energy compared with primary aluminium and does not deplete any natural resources like coal and bauxite, Agarwala said.

Source : economictimes.indiatimes.com