New Delhi, September 24, 2026: Indian primary copper producers are seeking a reduction in the Goods and Services Tax (GST) on copper products from 18% to 5%, arguing that record-high copper prices are tying up significant working capital across the supply chain.
The Indian Primary Copper Producers Association (IPCPA) is in discussions with the government over the proposed tax reduction. Association president Rohit Pathak said the move could potentially unlock as much as $3.6 billion currently tied up in tax payments.
Record copper prices increase cash requirements
Copper prices have surged sharply this year, with LME copper recently moving above $14,700 per tonne. Higher prices mean companies need more capital to finance raw-material purchases, processing and inventories.
According to the industry association, primary producers purchasing feedstock and downstream manufacturers buying copper products are both affected because the upfront tax requirement increases with the value of the metal.
Pathak said the tax burden is effectively locking up capital that could otherwise be used for expansion and investment. India’s copper industry is currently undertaking a multibillion-dollar investment programme, adding importance to the industry’s working-capital concerns.
Cable makers reduce inventories
The price rally is also affecting copper-consuming industries. Cable manufacturers and dealers are reportedly reducing inventories because holding large stocks has become increasingly expensive.
Industry representatives said inventories that were previously maintained for weeks are now being kept at levels measured in days, reflecting efforts by businesses to limit their exposure to volatile and elevated copper prices.
India has also remained reliant on copper imports following the 2018 shutdown of Vedanta’s Sterlite smelter, increasing the significance of global copper prices for domestic manufacturers and consumers.
The industry’s GST request now places the tax structure alongside raw-material costs, inventory requirements and investment needs as key issues for India’s copper sector.