European Union's protectionist policies for import of steel products from India and other markets coupled with shut down of Sterlite Copper's Tuticorin plant are among the major reasons for a sharp drop in exports of ferrous and non-ferrous metals, the EEPC India said Friday.
The engineering exporters' body cautioned that the declining trend in outward shipments of the key metals may continue for some time.
"Exports of primary steel fell by 10.7 per cent in January 2019 and 14 per cent in the first ten months of the current fiscal. Exports of copper and copper products dropped by 76.6 per cent in January 2019 and 69.6 per cent in first the ten months," EEPC India said in a statement.
''It is clear from these facts that the protectionist policies adopted by EU, the US are also responsible for the decline in exports of steel," the exporters' body said.
According to EEPC India, the country's refined copper production fell significantly during the first half of 2018-19 mainly due to the shutdown of the 400 KT, Tuticorin smelter of Sterlite which accounted for 40 per cent of India's smelting capacity.
''Recently, the Supreme Court refused to allow Vedanta plan to reopen Sterlite Copper's Tuticorin plant. Therefore, in this context, EEPC India feels that the trend in exports of copper will continue," the body said.
Outward shipments of zinc and products declined by 17.6 per cent in January 2019 and 29.7 per cent in the first ten months, according to EEPC India analysis. Despatches of tin and products fell by 54.8 per cent in January 2019 and 17.4 per cent in the cumulative months of the current fiscal, it said.
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"The cumulative impact of the fall in these four product lines is USD 3.542 billion for the first ten months (without any growth)," said EEPC India Chairman Ravi Sehgal.
The country's exports grew marginally by 3.74 per cent in January due to subdued performance of key sectors including engineering, leather, and gems & jewellery, even as the trade deficit narrowed to USD 14.73 billion.
According to data from the commerce ministry, exports during the month increased to USD 26.36 billion, compared with USD 25.41 billion in January 2018.
EEPC India said the domestic industry relies heavily on imports of copper concentrate from far off countries, particularly South Africa, which increases cost of production.
"The duty on the copper concentrate is presently 2.5 per cent finished goods coming at zero duty, there is a situation of inverted duty structure. Government could consider removal of this duty in order to help the industry becoming globally competitive," the body suggested.