Copper Producers Seek GST Cut as Record Prices Strain Working Capital

India's copper producers are seeking a reduction in Goods and Services Tax (GST) from 18% to 5%. The Indian Primary Copper Producers Association, led by President Rohit Pathak, is discussing this proposal with the government. The goal is to release $3.6 billion in working capital across the copper supply chain.

The current record metal prices are putting pressure on cash flow during production and sales cycles. According to Pathak, primary producers such as Hindalco Industries operate on a three-month concentrate cycle, leaving capital committed to material being bought and processed. The association argues that reducing the GST rate would ease this immediate funding pressure.

Cable makers and dealers are holding less stock due to the increased capital required for inventory, which adds another dimension to the industry's request. Producers want relief from upfront cash burdens while buyers become more cautious about purchasing copper in large quantities.