Market Issues

As a result of recent cases of ammunition explosion in imported scrap, regulators decided to formulate a policy where only registered companies (i.e. buyers as well as sellers) would be able to import and export scrap into India.

The Ministry of Commerce, through the Directorate General of Foreign Trade (DGFT), formulates and implements India’s foreign trade policy. DGFT decided to formulate a policy where only companies (i.e. buyers as well as sellers) registered with DGFT would be able to import and export scrap into India. To register, exporters are being required to provide proof of their financial and business standing, including details of membership of major recycling organizations such as Bureau of International Recycling. The registration of companies will replace a cumbersome system of pre-shipment inspections which has been in place for all non-shredded scrap metal imports. Although this new policy was to be implemented in October 2007, the DGFT has delayed (for the fourth time) its new scrap metal import policy until it can solve problems in processing the large number of applications received from importers as well as exporters.

India's imports of scrap copper, brass and aluminum have started slowing down as a result of stricter enforcement of environment licensing regulations by Indian government officials. Only fabricating or processing firms registered with the Pollution Control Board (PCB) can import scrap, the PCB registration process takes months to complete and permits are not issued to trading companies. Since traders cannot import, small firms who do not have the capacity to buy from overseas have to pay more for their raw materials. Some reports indicate that more than 100 firms have stopped manufacturing because of the regulation. Analysts expect scrap imports could slow 15 percent from about a million metric tons last year.