Before you agree a CIF price on a scrap shipment into India, you need to know what that price becomes after Indian customs is done with it. Your buyer already knows. If you don’t, the margin conversation is one-sided before it starts.

The good news is that India’s scrap import duty structure is friendlier than most exporters expect. Ferrous scrap carries nil basic customs duty. Lead and zinc scrap were brought to nil in the 2026-27 Budget. Copper, brass and aluminium sit at a modest 2.5%. But the full landed cost stacks three separate charges on top of each other, adds port and freight costs on top of that, and layers in a compliance step (PSIC) that catches out first-time shippers from the wrong country. Get any one piece wrong and your number is off by enough to lose the deal.

Use the calculator below to get your landed cost in seconds. Every charge is explained underneath, with a current worked example and the compliance rules that decide whether your container clears at all.

The Three Charges That Build India’s Scrap Import Duty

Every scrap import into India passes through the same three-layer cost structure. The charges apply in sequence, each calculated on a slightly different base.

Layer 1: Basic Customs Duty (BCD). This is the primary tariff. For ferrous scrap under HSN 7204, the statutory rate is 2.5%, but an exemption notification has kept the effective BCD at nil since 2021 to protect raw-material costs for Indian steel mills. Lead and zinc scrap were brought to nil in the 2026-27 Budget. Copper, brass and aluminium scrap carry a concessional 2.5%. BCD matters more than its size suggests, because it’s the one charge with no recovery mechanism.

Layer 2: Social Welfare Surcharge (SWS). A surcharge of 10% on the BCD amount. When BCD is nil, SWS is nil too. When BCD applies at 2.5%, SWS adds another 0.25% on the CIF value. Small, but real. Leave it out and your number comes in understated.

Layer 3: Integrated GST (IGST). This is the big one: 18% on every ferrous and non-ferrous scrap grade. It’s charged on the assessable value plus BCD plus SWS, not on the CIF value alone. The rate survived the September 2025 GST overhaul unchanged, so anyone expecting a cut after “GST 2.0” won’t find one on metal scrap. The upside is that a GST-registered importer claims the full amount back as Input Tax Credit, so IGST is a cash-flow item, not a permanent cost.

Why the Old “+1% Landing Charge” No Longer Applies

If you’ve used an older duty calculator, you may have seen assessable value worked out as CIF × 1.01, a flat 1% added for “landing charges.” That step is out of date.

The Supreme Court struck down that notional 1% loading in the Wipro case, and the government removed it from the Customs Valuation Rules through Notification 91/2017-Customs (N.T.). Handling charges are now added only when actual costs are known and incurred up to the port of import. For a normal CIF shipment, where transport and insurance are already inside the CIF price, the assessable value is simply the CIF value. Adding a phantom 1% inflates every charge stacked on top of it. The calculator above uses the current method.

The Landed Cost Formula, Step by Step

• Step 1: Assessable Value = CIF Value (no notional landing charge added)
• Step 2: BCD = Assessable Value × BCD rate (nil for ferrous, lead and zinc; 2.5% for copper, brass and aluminium)
• Step 3: SWS = BCD × 10%
• Step 4: IGST Base = Assessable Value + BCD + SWS
• Step 5: IGST = IGST Base × 18%
• Step 6: Cash Landed Cost = CIF + BCD + SWS + IGST + Port Handling + CHA + Inland Freight
• Step 7: Effective Cost After ITC = Cash Landed Cost minus IGST (because a registered importer recovers the IGST)

That last step is the one most calculators skip, and it’s the one that actually decides whether a deal works. Compare the effective cost after ITC against your ex-GST domestic rate, not the IGST-inclusive figure against a GST-exclusive market price.

Worked Example: 500 MT HMS 1 at USD 375/MT CIF Nhava Sheva

Late-August 2026 numbers: containerised HMS into India is bid around USD 372-375/MT CFR, with the rupee near ₹95.5 to the dollar.

Here’s what that tells you. The effective landed cost after ITC is about ₹38,100/MT. Domestic HMS 1 in Mumbai is trading near ₹33,100/MT ex-GST. So at USD 375 CIF, imported material lands roughly ₹5,000/MT above the local rate, it isn’t competitive right now, which is exactly why Indian containerised buying has been thin. For the deal to work, either the CIF price has to drop or domestic rates have to rise. That gap, in one number, is the whole negotiation.

What the IGST Credit Really Means in Practice

An 18% tax sounds punishing. For a registered importer, it’s mostly a pass-through.

The importer pays ₹32,23,125 in IGST at the port and gets the entire amount back as Input Tax Credit against the GST charged on their onward sales. Melt the scrap, sell the billets or bars with 18% GST on the invoice, and the import credit offsets that output liability. Net IGST cost to a compliant importer: effectively zero. It’s a cash advance to the government, recovered through ITC once the credit is set off, typically within a normal filing cycle, subject to their overall credit position.

This is why Indian mills shrug off the 18% but pay close attention to BCD. BCD is a real, permanent cost with no credit behind it. A nil BCD on ferrous scrap is worth far more to a buyer than the headline percentage implies, and it’s why the 2.5% on copper and aluminium, small as it looks, genuinely bites.

Scrap Import Duty by Material: 2026 Rate Table

The practical split is simple. On ferrous, lead and zinc the only charge that touches your buyer’s cost is the recoverable IGST, so their real duty burden is close to zero. On copper, brass and aluminium there’s a 2.75% permanent cost (BCD plus SWS) sitting underneath the recoverable IGST. That 2.75% is the number to build into a non-ferrous CIF price.

Copper, Brass and Aluminium: The Non-Ferrous 2.5% You Can’t Ignore

Two things trip people up on non-ferrous scrap. First, classification: brass is a copper-zinc alloy, so brass scrap is filed under HSN 7404 alongside copper, not under a separate heading, and it carries the same concessional 2.5% BCD. Second, the duty is real and permanent. Copper and aluminium scrap both attract 2.5% BCD, 0.25% SWS and 18% IGST. Only the IGST comes back.

For a per-kilo feel: if copper scrap lands at, say, ₹700/kg CIF, the permanent duty (BCD plus SWS at 2.75%) is roughly ₹19/kg that never comes back, with the 18% IGST recovered later through ITC. On a full container that permanent slice adds up fast, and it’s the part an Indian buyer will price against you if you quote as though non-ferrous were duty-free.

The aluminium duty is genuinely in play. There’s active pressure to change it, but in the opposite direction to what many exporters assume. The Material Recycling Association of India has been pushing to scrap the 2.5% duty entirely, and a Ministry of Mines Joint Working Group agreed in June 2026 that removal should be considered. The Aluminium Association of India, representing primary producers, wants the 2.5% held for now and a higher 7.5% applied only to low-grade material once BIS quality standards are notified. So the realistic scenarios are “duty removed” or “duty split by grade”, not a blanket hike. If you trade aluminium scrap, this is the one rate worth watching month to month.

Before Duty, There’s Compliance: PSIC and Designated Ports

Duty is only half the story. A shipment that clears on paper can still sit stuck at the port if the compliance side isn’t right, and this is where origin country matters as much as grade.

India requires a Pre-Shipment Inspection Certificate (PSIC) for metallic waste and scrap, confirming the consignment is free of arms, ammunition, explosives and radioactive material. But scrap from six “safe” origins, the USA, UK, Canada, Australia, the European Union and New Zealand, is exempt from PSIC when it’s cleared through ten designated ports: JNPT (Nhava Sheva), Mumbai, Mundra, Kandla, Hazira, Chennai, Tuticorin, Krishnapatnam, Kattupalli and Kamarajar (Ennore). Even then, the shipment must carry a supplier or scrap-yard certificate confirming no radioactive material or explosives, and every container is screened through radiation portal monitors and scanners on arrival.

What this means in practice:

• Shipping from the USA, Canada, Australia, the UK or the EU? Route through a designated port and you skip the PSIC, but you still need the supplier’s radiation/explosive-free declaration.
• Shipping from Dubai, the wider UAE, South Africa, or anywhere outside the safe list? A PSIC from a DGFT-approved inspection agency is mandatory before the vessel sails. Trans-shipment through a safe country doesn’t earn the exemption, origin is what counts.
• Unshredded, loose or compressed scrap can only be imported through designated ports fitted with the required screening equipment.

Missing or late PSIC paperwork is one of the most common reasons a first-time consignment gets held, and demurrage on a stuck parcel can eat a deal’s margin in days. The documents checklist for exporting scrap to India walks through every paper that needs to be in order before loading.

Port Costs Most CIF Calculations Miss

Customs duty gets all the attention. The port-side charges, separate from duty, and rarely spelled out clearly by a buyer, quietly add to every shipment.

The free storage window at major ports is usually 3-7 days for FCL containers. After that, storage runs daily. On a multi-container shipment held up by a documentation problem, demurrage alone can swallow the whole deal margin in under two weeks, which loops straight back to getting the PSIC and paperwork right the first time.

How to Use This to Negotiate a Better Price

The landed cost calculation is your negotiating tool. Run it before you quote CIF, not after.

Start from today’s domestic scrap rates in India, the ex-GST price a local buyer is actually paying. Subtract your effective landed cost (the one with IGST taken out, since your buyer recovers it). Whatever’s left is the room in the deal. If domestic HMS is at ₹33,100/MT and your material lands at ₹38,100/MT effective, the buyer has no reason to import at your price, he’s paying ₹5,000/MT more than he can buy locally. Either the CIF comes down or the deal waits for the market to move.

To understand what the buyer does with the material once it lands, the yield math and the grades mills pay up for, see the guide on how steel plants decide scrap buying rates. Regional demand shifts the picture too; northern buyers price differently from the south, as the swings in Delhi NCR scrap rates show week to week. And if you’re weighing grades, the difference in recovery between heavy melting and cast iron is covered in the [INTERNAL LINK NEEDED: HMS vs cast iron scrap value comparison].

Rates and Rules Worth Watching

Aluminium scrap BCD. Currently 2.5%. The realistic near-term outcomes are removal (recyclers and a Ministry of Mines working group favour this) or a grade-split with 7.5% on low grades once BIS standards land. Either way the picture for aluminium shipments can shift, so confirm the rate before pricing.

Tariff restructuring. From 1 May 2026, a batch of items, scrap metals among them, moved from standalone exemption notifications into the First Schedule of the tariff. The effective rates on scrap didn’t change, but the legal reference did, so an older notification number you relied on may now point to the tariff schedule instead.

Classification at the boundary. Clean scrap grades are generally clear of anti-dumping measures, but re-rollable and borderline material can get reclassified as a product at the gate, which changes the duty entirely. Keep your documentation tight so customs follows your intended track. Monitor DGFT and Ministry of Commerce notifications if you regularly ship material that sits near the scrap-versus-product line.

Scrap Import Duty in India: FAQs

What is the import duty on iron scrap in India?

Ferrous (iron and steel) scrap under HSN 7204 carries nil Basic Customs Duty and nil SWS. IGST applies at 18% but is recoverable as Input Tax Credit by a registered importer, so the real duty cost is close to zero.

What is the import duty on copper scrap in India?

Copper scrap (HSN 7404) attracts a concessional 2.5% BCD, 0.25% SWS and 18% IGST. On a per-kg basis, the permanent (non-recoverable) part is about 2.75% of the CIF value; the 18% IGST is recovered through ITC.

What is the import duty on aluminium scrap in India?

Aluminium scrap (HSN 7602) is at 2.5% BCD plus 0.25% SWS and 18% IGST. This rate is under review, there’s pressure to remove it and separate pressure to raise it on low grades only, so verify before you quote.

What is BCD, and what is IGST?

BCD (Basic Customs Duty) is the primary tariff on imported goods, charged as a percentage of assessable value; it has no credit mechanism, so it’s a permanent cost. IGST (Integrated GST) is the 18% GST charged at import on the value plus duties; a registered importer recovers it in full as Input Tax Credit.

Do I need a PSIC to import scrap from Dubai or the UAE?

Yes. The UAE isn’t on India’s “safe country” list, so a Pre-Shipment Inspection Certificate from a DGFT-approved agency is mandatory before shipping. Scrap from the USA, UK, Canada, Australia, the EU and New Zealand is PSIC-exempt when cleared through the ten designated ports.

Does the “GST 2.0” reform change the tax on scrap imports?

No. The September 2025 GST rate changes left metal scrap at 18%. Iron, copper, brass, aluminium, lead and zinc scrap all remain at 18% IGST on import.

The Number to Know Before You Pick Up the Phone

Your target CIF price is the ex-GST domestic rate, minus the importer’s margin, minus port charges per MT, minus inland freight per MT, minus any permanent duty (nil on ferrous, ~2.75% on non-ferrous). IGST stays out of the sum because the buyer gets it back.

Most Indian importers work on a margin of roughly USD 5-15/MT on standard ferrous grades. Build that in. Whatever’s left is the highest CIF at which your buyer can make the deal work. Quote above it and you’re negotiating uphill from the first word. Quote at or below it with clean, correctly graded material and the right paperwork, and you’re a credible supplier before the call even starts.

Duty rates and compliance rules described here reflect notifications in force as of August 2026 and are subject to change through customs and DGFT notifications during the year. Always confirm the current applicable rate on the CBIC customs tariff portal and the latest import-policy conditions with the DGFT before finalising any shipment.