Budget FY'26: Zero BCD on copper, zinc to boost recycling

In a significant push for India's non-ferrous recycling sector, Finance Minister Nirmala Sitharaman announced a complete exemption of basic customs duty (BCD) on copper scrap, zinc scrap, and lead scrap in the Union Budget 2025-26. The move aims to reduce import dependence, lower production costs, and strengthen domestic processing in key industries.

BCD removal to aid non-ferrous recycling

The government has removed the 2.5% BCD on copper scrap, making imports duty-free. India imported 0.32 million tonnes (mnt) of copper scrap in CY 2024, up from 0.31 mnt in CY 2023. Previously, the duty was lowered from 5% to 2.5% in earlier budgets.

Similarly, full BCD exemption on zinc and lead scrap imports will boost their domestic processing and job creation. India imported 151,107 tonnes of lead scrap and 73,947 tonnes of zinc scrap in CY 2024, indicating strong demand for secondary raw materials.

Push for critical minerals & domestic processing

The budget also grants BCD exemptions on 12 other critical minerals, including cobalt products, lithium-ion battery scrap, and LED components, reinforcing India's self-reliance in strategic sectors. Additionally, the BCD exemption on raw materials for shipbuilding has been extended for 10 years, ensuring long-term benefits for the industry.

No change in ferrous scrap, aluminium & nickel duties

While non-ferrous scrap duties have been eliminated, there are no changes in the duty structure for ferrous scrap, aluminium, nickel, and silicon. Moreover, the effective BCD on stainless steel flat products remains at 7.5%, despite a revision in the notified duty to 15%, ensuring no real impact on import costs.

Outlook

The BCD exemptions and reductions in Budget FY26 are expected to enhance recycling competitiveness, lower input costs, and support India's goal of self-reliance in critical materials, particularly in the non-ferrous sector.