Business News | Material Recycling Industry Seeks Zero Duty on Zinc Dross, Flags Customs Anomaly

PNN

Mumbai (Maharashtra) [India], September 1: The recycling industry has urged the Union finance ministry to remove the 5% customs duty on zinc dross, arguing that the levy creates an anomaly in the duty structure and puts domestic manufacturers at a disadvantage.

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The demand comes after the Union Budget 2025 abolished customs duty on zinc scrap as part of the government's efforts to promote recycling, strengthen the circular economy and improve manufacturing competitiveness. However, zinc dross, a widely traded and recycled form of secondary zinc, continues to attract a 5% duty.

Industry stakeholders said zinc dross has historically been treated and traded as zinc scrap in international recycling markets and is recognised under global recycling standards, including those prescribed by the Institute of Scrap Recycling Industries (ISRI). Several Indian public and private sector companies also classify and use zinc dross as recyclable zinc scrap.

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With more than 92% metallic zinc content, zinc dross is extensively recycled to manufacture zinc oxide, a key raw material used in tyres, rubber products, healthcare applications, ceramics, paints, pigments and fertilisers.

While countries such as Thailand, Singapore and Malaysia levy nil customs duty on zinc dross, India's prevailing net customs duty of 2.5% can place domestic industry at a relative disadvantage in the international market, highlighting the need for a balanced policy approach that supports both industry competitiveness and the government's revenue objectives.

Mr. Sanjay Mehta, President, Material Recycling Association of India (MRAI), said, "The Government has taken a highly progressive step by removing customs duty on Zinc Scrap to strengthen India's recycling ecosystem and support manufacturing. However, Zinc Dross, which is universally recognised as a recyclable form of Zinc Scrap, continues to face a 5% customs duty. Rationalising this anomaly will significantly benefit downstream industries, particularly MSMEs, while advancing the objectives of circular economy and Make in India."

According to industry representatives, the continued duty on zinc dross is increasing the cost of raw materials for domestic zinc oxide manufacturers, affecting their competitiveness in global markets and adding to costs for downstream industries.

Mr. Anirudh Jhunjhunwala, Director, MRAI and Managing Director & CEO, J.G. Chemicals Ltd., said, "Zinc Dross is an important recyclable secondary zinc resource that plays a crucial role in the domestic Zinc Oxide value chain. The continuation of customs duty on Zinc Dross creates avoidable cost pressures for Indian manufacturers despite the Government's larger vision of promoting recycling and sustainable manufacturing. Extending NIL customs duty to Zinc Dross will improve competitiveness for domestic industry, support MSMEs and strengthen India's position as a responsible recycling-driven economy."

A senior committee member associated with the recycling industry said, "Zinc Dross is not a waste material but a valuable secondary zinc resource that is extensively recycled in India. The continued duty on Zinc Dross creates an uneven playing field and increases input costs across sectors linked to healthcare, fertilizers, rubber and ceramics. Extending NIL customs duty to Zinc Dross would provide immediate relief to manufacturers and further strengthen India's sustainable industrial growth agenda."

Industry stakeholders said aligning the duty on zinc dross with zinc scrap would improve raw material availability for domestic recyclers, reduce production costs and encourage greater resource efficiency. They also said the move would reinforce the government's focus on recycling-led manufacturing and reduce dependence on virgin natural resources.

The recycling industry has therefore urged the finance ministry to immediately extend the zero-customs duty applicable to zinc scrap to zinc dross, saying the move would ensure consistency in policy and strengthen India's recycling and circular economy ecosystem.

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