Copper Producers Push for Tax Cut Amid Record Prices

India's copper producers are calling for a reduction in Goods and Services Tax (GST) on copper products from 18% to 5%, citing record prices that have tied up billions of dollars in working capital. The Indian Primary Copper Producers Association (IPCPA) is seeking the tax cut, which could release up to $3.6 billion currently locked in tax payments.

Copper prices have surged to unprecedented levels, exceeding $14,700 per ton on the London Metal Exchange this month. This price rally has increased working-capital requirements for Indian manufacturers and downstream users, particularly since the country relies more heavily on imports following the 2018 closure of Vedanta's Sterlite copper smelter.

The GST reduction is not only a tax measure but also an attempt to improve liquidity across the copper value chain. If implemented, lower upfront tax outflows could free capital for capacity expansion, procurement, and new investments at a time when both copper prices and the strategic importance of domestic supply are rising.