Zinc demand in India has been subdued on the back of reduced fund flows to the infrastructure sector and a decline in automobile production, noted India Lead Zinc Development Association (ILZDA), urging the government to incentivize lead and zinc exports with at least 5pc rebate.
The association has requested the government to maintain the RoDTEP (Remission of Duties and Taxes on Export Products) at around 5pc for lead and zinc exports, in the letter to the Ministry of Commerce. In an absence of domestic demand, Indian exports should gain traction.
RoDTEP scheme, effective from January 2021, replaces the Merchandise Export from India Scheme. The scheme in general would ensure that the exporters receive the refunds on the embedded taxes and duties which were previously non-recoverable. The purpose of the scheme is to boost the export of goods with lower export volumes. RoDTEP is compliant with World Trade Organization (WTO) norms. The product-wise percentages under the RoDTEP scheme are yet to be disclosed by the government.
The lead and zinc industry faces a tax and duty rate of 17-24pc on its fob value and therefore, ILZDA has appealed to the government to maintain RoDTEP rates at a minimum of 5pc for lead and zinc exports.
Another situation that has arrived and pressures the market is the availability of lower-priced zinc imports from Korea following the India-Korea CEPA (Comprehensive Economic Partnership Agreement) which offers zero duty.
The exports market is very competitive with several global players. To sustain its global market share, Indian exporters need adequate government support in the form of RoDTEP percentage appeal. Many countries do not produce lead and zinc which are crucial metals for automobile, infrastructure among other sectors. India should take advantage of this situation and increase its supply to the global market.