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TMI BlogIndo-Sri Lanka Free Trade Agreement - Surge in Import of copper from Sri Lanka - RegardingX X X X Extracts X X X X X X X X Extracts X X X X ..... rade Agreement (ISLFTA) on 18th July, 2003 at New Delhi, the surge in copper imports from Sri Lanka and consequent serious injury it is causing to the domestic industry in India came up for discussion. The Sri Lankan side was informed that this rise in exports of copper is not due to genuine value addition of 35% in Sri Lanka, but due to the circumvention of the value addition norms by some unscrupulous traders. The Sri Lankan side has been requested to put an end to the export of 2. copper strips and profiles immediately, and other items of copper (other than copper strips and profiles) within a period of six weeks from 18th July, 2003. However, the Origin certificates issued by Sri Lankan authorities on these items will continue t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copper smelter or refinery or continuous cast (cc) rod facility to convert concentrate into metal and metal to cc rod respectively. It has only facility for casting and wire drawing, which means that in Sri Lanka conversion can take place only from one metal product to another metal product. Given the above facts, the maximum value addition, which can take place (metal to metal) in Sri Lanka cannot be more than 10 to 15%. Scrap, which is being used by some traders to make profiles/extrusions, is nothing but conversion from metal to metal. Therefore, even in that case the value addition cannot be more than 10 to 15% as copper is a highly malleable metal. Clearly, Sri Lankan exporters cannot meet the 35% value addition norm under the Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raw material is being resorted to in a big way to satisfy the requirement of value addition norms through manipulation. The effect of this trade can also be seen from the trade figures of Sri Lanka. In 2002, the copper imports in Sri Lanka rose from 7480 MT in 2001 to 53000 MT out of which copper exports to India were of the magnitude of 47430 MT, thereby becoming almost 800% of domestic consumption of Sri Lanka. It is evident that ISLFTA is being used as a conduit for exports of copper produced in the third country. This is, therefore, in no way helping the Sri Lankan industry. On the other hand, due to the unfair exports under ISLFTA, the domestic sales of copper in India by Indian industry have come down by a huge margin of 23.45% f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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