India’s copper industry warns of UAE import surge risks

India’s copper industry, a cornerstone of its industrial growth, faces a growing threat from surging copper rod imports from the UAE under the India-UAE Comprehensive Economic Partnership Agreement (CEPA). The Indian Primary Copper Producers Association (IPCPA) has sounded the alarm, cautioning that these imports, facilitated by minimal value addition and lenient trade policies, jeopardize domestic investments in copper refining and undermine the sector’s long-term viability.

India’s copper refining capacity, built over decades by industry leaders like Hindustan Copper Ltd, Hindalco Industries, Vedanta Ltd, and Kutch Copper Ltd (Adani Group), stands at an impressive 1.25 million tonnes, surpassing the projected FY25 demand of 0.85 million tonnes. With ambitious expansion plans on the horizon, the industry is poised for growth. However, the IPCPA warns that CEPA’s structure allows UAE firms, lacking copper mining or refining infrastructure, to export copper rods to India by merely converting imported cathodes—a process involving negligible value addition. This exploits phased tariff reductions, with duties on copper rods dropping from 2% to 1% in May 2025 and set to reach zero by May 2026.

The impact is evident in trade data: UAE copper rod imports nearly doubled from 43.45 kilotonnes in FY24 to 86.06 kilotonnes in FY25, with non-advance authorization imports surging 239% to 63.89 kilotonnes. In the first four months of FY26 alone, imports reached 42.71 kilotonnes, signaling an accelerating trend. The IPCPA attributes this surge to an excessively high tariff rate quota (TRQ) of 85,000 tonnes and Product-Specific Rules (PSR) under CEPA, which permit minimally processed goods to enter duty-free, often via Chinese-controlled supply chains.

To safeguard India’s copper industry, the IPCPA has urged the government to revise CEPA’s PSR, removing “melt, cast, and rolled” from the rules and mandating a minimum 40% value addition for non-originating materials. It also recommends capping the TRQ at 20,000 tonnes annually to protect domestic producers. Without these reforms, the association warns, India’s copper refining ambitions risk being stifled, echoing trends seen in other free trade agreements like India-ASEAN and India-Japan, where duty eliminations led to import surges and deterred local investments. As India strives for self-reliance in critical industries, addressing these trade policy gaps is crucial to ensuring the copper sector’s growth and sustainability.