The Indian Primary Copper Producers Association (IPCPA) has sounded the alarm over a sharp rise in copper rod imports from the United Arab Emirates (UAE) under the India-UAE Comprehensive Economic Partnership Agreement (CEPA), warning that the trend threatens future domestic investments in copper refining.
Domestic Capacity Outpaces Demand, Expansion Plans at Risk
Since 1996, Indian producers — including Hindustan Copper Ltd, Hindalco Industries, Vedanta Ltd, and Kutch Copper Ltd (Adani Group) — have built a robust refined copper capacity of 1.25 million tons, far exceeding the projected domestic demand of 0.85 million tons for FY25. The industry had been preparing to expand capacity further over the next decade to support India’s industrial and energy transition ambitions.
However, IPCPA cautioned that the current structure of CEPA now poses a “significant obstacle” to these plans. Despite lacking any copper mining, smelting, or refining infrastructure, the UAE is exporting copper rods to India with minimal value addition, simply converting imported copper cathodes into rods. This minor processing step alters the tariff classification but does little to enhance the product’s real value, the association said.
Imports Double as Tariffs Fall Under CEPA
Imports stayed modest through FY23 and FY24 as CEPA gradually phased in tariff reductions. In May 2025, the government cut the import duty on copper rods from 2% to 1%. By May 2026, authorities will fully eliminate the duty — a move IPCPA fears will trigger a flood of imports.
Already, the impact is visible. Copper rod imports from the UAE nearly doubled to 86.06 kilotonnes (kt) in FY25 from 43.45 kt in FY24. Imports outside the advance authorisation route surged 239%, from 18.82 kt in FY24 to 63.89 kt in FY25. In just the first four months of FY26, imports had already reached 42.71 kt, roughly half of the previous year’s total.
“We are seeing a clear uptick in imports under CEPA and expect a further surge once duties drop to zero,” IPCPA warned, pointing to similar experiences under other free trade agreements (FTAs) such as India-ASEAN and India-Japan.
Tariff Quota Offers Little Protection to Domestic Industry
IPCPA also criticised the tariff rate quota (TRQ) of 85,000 tonnes for copper rods under CEPA. The association called the quota excessive and said it fails to protect domestic producers effectively. The high quota, the association argued, fails to reflect India’s market conditions or the strategic importance of local copper manufacturing.
Adding to concerns, much of the copper routed through the UAE is part of Chinese-controlled supply chains, with minimal local processing. The current Product-Specific Rule (PSR) under CEPA allows minimally processed goods to enter India duty-free. This practice undermines the competitiveness and long-term viability of India’s copper refining industry.
Industry Seeks Stricter Rules of Origin and Lower Quota
To address these concerns, IPCPA has urged the government to tighten CEPA’s rules and close existing loopholes. It has called for the removal of “melt, cast, and rolled” from the current PSR and proposed a more stringent Rules of Origin framework. Under its recommendations:
*Non-originating materials used in production should fall under a different tariff subheading.
*A minimum value addition of 40% should be mandated for copper rod exports to qualify for CEPA benefits.
*The TRQ for copper wire rods should be capped at 20,000 tonnes per annum to prevent market distortion.
A Call for Policy Correction Before May 2026
As reported by thehindubusinessline.com, the complete elimination of import duties is just months away. The copper industry is calling for swift policy action to protect domestic investments. Without intervention, IPCPA warned, India risks ceding control of its copper value chain to foreign players relying on minimal processing and duty-free trade routes. “Unless the CEPA rules are revised, India’s hard-won copper manufacturing capacity and future investments could be severely undermined,” the association said.
