The India-UAE Comprehensive Economic Partnership Agreement (CEPA) was the first trade pact to be concluded in 2022 after a decade’s gap. The results have been impressive. Sample this: From US$180 million annually in the 1970s, bilateral trade between the two touched US$100.06 billion in FY 2024-25.

India-UAE CEPA

But the devil lies in the details. Chapter 74 of the India-UAE CEPA deals with copper and copper articles. However, one of its provisions - about whether a copper rod is a UAE-origin product – has become controversial. 

Under the CEPA product-specific rule, refined copper rods can qualify for imports to India if they are “melt, cast and rolled” in the UAE “OR” if they have a value addition of 40% by UAE companies within that country.  

“The problem is when you have written ‘OR’, it means an exporter can choose either,” an industry source said.

So, even when the copper is sourced from a third country - read China, UAE companies just have to ensure a simple “melt, cast and roll” process for it to qualify for export to India. This copper qualifies as a UAE origin product even though there is little processing and limited value addition done within the UAE.

So, the word “OR” is making it possible for this copper to slip through! 

Following the India-UAE trade pact, the import of copper has surged, and this is now beginning to impact domestic producers at a time when demand in the country is rapidly galloping.

Copper, The Next Gold

Copper is a key raw material used by renewable energy, electric vehicle, infrastructure, and electronics industries.

The rise in imports is directly related to the gradual decrease in the CEPA duty: copper rods imported from the UAE currently stand at 0% duty.

After the CEPA signing, the duty stood at 2%, which was brought down to 1% in May 2025. Eventually, the duty was abolished.

But India’s copper producers warn that the removal of the duty would further accelerate the copper import flow and the inward shipping of the metal would also be of lower quality.

Impact On Domestic Producers

While this could jeopardise the growth of domestic producers, the import bill is expanding too, something that would have an overall impact on the economy.

The major domestic players that manufacture copper include Hindustan Copper Ltd, the Adani Group and JSW among others.

Sources said that several challenges related to the availability of resources remain, and supply chain issues could pose problems in the country’s aim to achieve self-reliance.

Demand For Copper Rods

India's total copper demand in 2024-25 was 1,878 kilotonnes, an increase of 9.3% over the previous year, of which the demand for copper rods was 1,201 kilotonnes.

The scale of the increase matters because the product at the centre of the dispute is already a major part of India's copper market. The industry data shows that copper rods were the largest single segment of copper use in FY25, accounting for 1,201 kilotonnes of apparent usage.

The India-UAE CEPA was built on the principle of reducing trade barriers, and copper rods have been put on a phased duty-reduction path. 

The Tariff Rate Quota (TRQ) of 85,000 tonnes was also allocated for refined copper rods. But Indian primary producers have complained that this level is too high and want it to be reduced to 20,000 tonnes.

Why Indian Copper Producers Are Worried

India currently has a primary copper capacity of approximately 1,300 kilotonnes while the demand for primary copper is about 1,000 kilotonnes. It's not that India cannot produce copper; it's just that if the import demand rises, India's newly developed copper production facilities may remain underutilised.

 “The industry is in a position to fulfil the requirement easily, but if these imports continue, then our capacities will remain unutilised, and this is worrisome,” a senior executive of a domestic copper manufacturing company said.

The Birla Copper plant at Dahej, Gujarat, is one of the biggest single-location copper smelters in the world, with a copper smelting capacity of 500,000 tonnes a year and integrated refining and rod-making facilities. 

The company is also in the process of expanding its smelter by 300,000 tonnes to boost its smelting capacity. It also reflects a general trend of Indian copper producers to build up their local supply to meet growing demand, in addition to the new projects. 

The state-owned Hindustan Copper Ltd has achieved ore production of 3.67 million tonnes in FY2025-26, which is 6% higher than last year. It has an installed capacity of 50,000 TPA to produce LME Grade 'A' refined copper using a secondary smelting and refining route. 

The rise in imports naturally has become a cause for concern for Indian producers.

Other FTAs

India has been aggressively signing free trade agreements (FTAs) to boost its economic engagements the world over, but the one signed with the UAE has been in the spotlight for multiple reasons. 

Sources have told The Secretariat that while inking the trade pacts, focus must be on the fine print to ensure the deals are beneficial to both signatories.

“The subsequent FTAs have been studied and analysed well, and such clauses have been omitted, but this also underscores the point that trade pacts must be reviewed and revisited from time to time,” said a senior government official on condition of anonymity.