Substantial Increase in Copper Import Value
India’s copper import bill has risen by 20% year-on-year in FY23, reaching a value of Rs. 27,131 crore (approximately $3,237,397,000), up from Rs. 21,985 crore (approximately $2,647,838,000). This significant increase is attributed to the post-Covid economic recovery and a surge in demand, particularly from the electric vehicle and renewable energy sectors.
Copper and Economic Activity Correlation
The demand for copper is closely linked to various economic activities due to its widespread use in construction, home appliances, and other sectors. This linkage is reflected in the increased need for copper imports to meet India’s growing demands.
Refined Copper Import Growth
According to ICRA, refined copper imports in India have increased by 30% in terms of volume during FY23 and by 180% in the first half of FY24.
India’s Position in Global Copper Production
India currently has a refined copper production capacity of 5.55 lakh tonnes for FY 2022-23, positioning it as the world’s 10th largest producer of the metal. The country predominantly imports copper and copper concentrates, which are essential raw materials for refined copper production.
Import Increase Driven by Refined Copper Demand
Pralhad Joshi, in his response to the Rajya Sabha, indicated that the spike in copper imports over the past two years is due to an increased demand for copper refining. This increase is associated with growth in sectors like infrastructure, construction, telecom, electrical, renewable energy, and electric vehicles. Notably, copper is among the 30 critical minerals identified by the Indian government.
Projected Domestic Demand Growth
Domestic refined copper demand in India is expected to maintain a growth rate of around 11% in FY24 and FY25, outpacing the global copper demand growth rate. Approximately 40% of the copper in India is consumed by the infrastructure and construction sectors, with the automobile and consumer durable sectors each accounting for 11-13%. Initiatives in affordable housing and electric vehicles are also driving this demand.
Upcoming Reduction in Import Reliance
The report highlights the anticipated copper smelter by the Adani Group, with a capacity of 0.5 million MT, slated to start from FY25. This development is likely to mitigate the current import reliance once it becomes fully operational.