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In India, one of the highly-anticipated annual events is the unveiling of the government’s financial budget, which sets the momentum for our economy. That was done on February 1. Remarkable in this budget were some very emphatic references by the finance minister to terms like “climate change”, “circular economy” and “clean, green energy”. It was inferred that, while India aims to become self-dependent, critical raw materials which help to achieve the above objectives should be prioritized. As a result, the nil customs duty status of all steel scraps has been extended by another year.

Prior to the budget, there were several representations from primary producers of aluminium and copper (who use mined resources and fossil fuels) to increase import duties on metal scraps. This has found no grounds, and instead the status quo has prevailed. Somehow, I take this as vindication of our industry and of its objectives. A robust scrap recycling ecosystem is in the interests of every country wishing to mitigate the risks of carbonization and climate change.

India is on a growth trajectory of around 8.5% this year. Despite elections coming up, this budget has not engaged in personal tax rate cuts but has rather declared a capex carnival. It will be spending a whopping additional 35% (about 4% of GDP) on several big projects which would see a massive transformation in the low-cost housing sector, in all transport-related infrastructure and in renewable energy, among many others. This is to happen at the cost of a widening fiscal deficit to 6.9%. However, in a post-pandemic rebuild, India wants to handle contemporary challenges through its own fiscal federalism doctrine.

Specific to metals, there has been good traction in the brass industry amid healthy domestic orders for components. Secondary aluminium producers are playing baseline as international scrap prices have firmed up, whereas domestic demand as well as export prices of ingots remain tepid.

Meanwhile, discussions between the industry and government representatives are still ongoing relating to setting up standards for non-ferrous scraps.

Encouraged by the words and proposals from the 2022 budget, let us hope that the secondary metals sector becomes one of the sunrise industries for India.