India Cuts Import Duty On Base Metals To 5% From 7.5%

India late Monday cut import duties on many raw materials used in the manufacturing sector in order to reduce inflation, which touched a two-year high of 6.12% for the week ended Jan. 6.

"With a view to reduce the cost of manufacturing and infrastructural development, (the) government has reduced the import duty on primary and semifinished aluminum, zinc, copper, tin and other base metals to 5% from 7.5%," an official statement said.

All the changes in import duty are applicable immediately.

The measures taken by the government may take some market participants by surprise, since they come hardly a month before the annual budget is placed before the Parliament on Feb. 28.

However, robust growth in the manufacturing sector and demand for housing have raised the cost of cement and other raw materials in recent months, which analysts say has stoked inflation.

The manufacturing sector grew 15.7% on the year in November mainly because of an expansion in demand for capital goods and consumer durables.

It is with this background that the government has completely removed the 12.5% import duty on portland cements.

The government has also cut the import duty on ferro alloys, stainless steel, other alloy steel, calcined alumina and refractories to 5% from 7.5%.

The import duty on pipes and tubes of aluminum, copper and zinc has been reduced to 7.5% from 12.5%.

For specified capital goods, their parts and winding wires, the import duty has been reduced to 7.5% from the earlier 12.5% or 10%.

For inorganic chemicals such as halogens, including fluorine, chlorine, bromine and iodine; sulfur, hydrogen, rare gases such as nitrogen, oxygen, silicon and phosphorus; and alkali metals such as sodium and calcium, the import duty has been reduced to 5% from 10%.

In case of carbon and carbon black feedstock, the import duty has been reduced to 5% from 10%.