Metal Scrap Export from India: Regulations and Opportunities

Updated: June 11, 2026 · 16 min read

India’s Union Budget 2024-25 cut basic customs duty on copper scrap to 2.5% — a move the Ministry of Steel and the non-ferrous industry had lobbied for across two budget cycles. That single line item reshaped inbound scrap economics almost overnight. What it also did, quietly, was draw renewed attention to the other side of the ledger: the rules, the risks, and the commercial opportunity in metal scrap export from India. For large scrap generators — steel re-rollers running excess mixed-grade inventory, automotive dismantlers clearing non-ferrous streams, or large industrial units decommissioning plant — the export window can be more lucrative than the domestic mandi. But the compliance architecture is genuinely complex, and getting it wrong triggers consequences that range from GST demand notices to criminal liability under the Environment (Protection) Act, 1986.

India’s Scrap Export Landscape: A ₹12,000 Crore Market With Shifting Rules

India sits at an unusual position in the global scrap trade: it is simultaneously one of the world’s largest scrap importers (driven by the electric arc furnace steel sector’s hunger for quality ferrous feed) and a meaningful scrap exporter (driven by surplus generation in non-ferrous streams, lower-grade ferrous material, and geographic proximity to South and South-East Asian buyers). The two flows coexist because quality differentials and logistics economics make direct substitution impractical.

According to data collated from DGFT’s trade statistics and industry estimates, India’s combined ferrous and non-ferrous scrap exports stood at approximately 1.2 million tonnes in FY 2023-24, with a realised value in the range of ₹11,000–12,000 crore at prevailing exchange rates. Bangladesh alone absorbed a substantial share of low-grade steel scrap from eastern India, while the UAE and Oman served as re-export and processing hubs for mixed non-ferrous material originating in Gujarat and Maharashtra.

The market is not static. In 2022, the government temporarily banned steel scrap exports amid domestic supply anxiety — a move that wiped out open contracts overnight. In FY 2024-25, DGFT re-opened most categories, but the episode underscored a structural truth: scrap export policy in India is responsive to domestic steel and metal prices, and businesses that treat the current open-export regime as permanent are taking a commercial risk without a compliance hedge. Our ferrous and non-ferrous metal recycling services page gives a sense of the grade categories that are most actively traded domestically — the same grades drive export pricing.

DGFT and the Foreign Trade Policy 2023: What Scrap Exporters Must Know

The governing framework for scrap exports sits primarily with the Directorate General of Foreign Trade (DGFT) under the Foreign Trade Policy 2023 (FTP 2023), notified on 1 April 2023. Under FTP 2023, goods are classified as Free, Restricted, Prohibited, or Canalised for export purposes. Most metal scrap categories — ferrous scrap (HS 7204), copper scrap (HS 7404), aluminium scrap (HS 7602), and lead scrap (HS 7802) — are listed as “Free” for export, meaning no export licence is required under normal conditions.

The HS Code Matrix: Getting Classification Right

Misclassification of scrap at the HS code level is one of the most common and expensive errors in scrap export. Customs authorities at Nhava Sheva, Mundra, and Chennai have flagged classification disputes on mixed-grade consignments, where exporters declared material under a broad heading to avoid export restrictions on a specific sub-grade. Under Section 111 of the Customs Act, 1962, mis-declared goods are liable to confiscation; under Section 114, the exporter faces a fine of up to three times the market value of the goods. The correct classification for mild steel scrap, for instance, is HS 7204.49 (other ferrous waste and scrap), while cast iron scrap falls under HS 7204.10. These are not interchangeable.

FTP 2023 also introduced a strengthened Authorised Economic Operator (AEO) pathway, and for high-volume scrap exporters moving more than 500 MT per month, AEO-T1 certification materially reduces documentary scrutiny and dwell time at ports. The GST portal’s HSN lookup remains the first-stop reference for classification, though exporters should cross-check against DGFT’s ITC(HS) Schedule II for any export-specific conditions.

The Hazardous Waste Trap: When Your Scrap Needs MoEFCC Consent

Here is where many exporters — including experienced ones — walk into serious legal exposure. The Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016 (notified under the Environment (Protection) Act, 1986, and last amended in 2019) govern the transboundary movement of any waste material that meets the hazardous criteria set out in Schedule I, II, or III of those Rules. The export of hazardous waste for disposal is prohibited; the export of hazardous waste for recovery or recycling requires prior informed consent from the Ministry of Environment, Forest and Climate Change (MoEFCC) and the competent authority of the receiving country, in compliance with the Basel Convention.

Which Scrap Categories Are Affected?

The practical question is: which metal scrap streams cross the hazardous threshold? Lead-acid battery scrap (HS 8548.10), lead dross, certain copper smelting slag, and e-waste-derived metals are the most common examples. Contaminated steel scrap — material containing residual paints with heavy metals, PCB-containing oils, or radioactive contamination — can also trigger hazardous classification under Rule 3(1) of the Hazardous and Other Wastes Rules. The CPCB’s hazardous waste portal maintains the updated Schedule of hazardous categories, and exporters must cross-reference their material against it before booking shipping space.

Penalty exposure under the Environment (Protection) Act, 1986 for unlawful transboundary movement includes imprisonment of up to five years and fines up to ₹1 lakh per day for continuing violations. The CPCB has, in recent enforcement cycles (FY 2024-25), specifically flagged unauthorised export of battery scrap as a priority enforcement area. If you are aggregating and exporting mixed non-ferrous scrap that includes any battery-derived material, the compliance question is not theoretical.

GST, FEMA, and the Documentation Stack That Customs Actually Checks

Export of goods from India is a “zero-rated supply” under Section 16 of the Integrated Goods and Services Tax Act, 2017 (IGST Act). That means scrap exporters are either entitled to a refund of input tax credit or can export under bond or a Letter of Undertaking (LUT) without payment of IGST. The LUT route — governed by Rule 96A of the CGST Rules, 2017 — is by far the cleaner option for regular exporters. The LUT must be filed on the GST portal before the first export shipment in each financial year; it is not auto-renewed. Missing the LUT filing and exporting without paying IGST is treated as a tax default, with interest at 18% per annum accruing from the date of export.

FEMA Compliance: The Repatriation Clock

On the foreign exchange side, scrap exports are governed by the Foreign Exchange Management Act, 1999 (FEMA) and the RBI’s Master Direction on Export of Goods and Services (updated through 2023). Export proceeds must be realised and repatriated to India within nine months from the date of shipment (extended from the earlier six-month window for most goods). Failure to repatriate within the prescribed timeline requires reporting to the AD (Authorised Dealer) bank and, beyond certain thresholds, to the RBI’s Export Receivables Cell. Penalties under FEMA can be up to three times the sum involved or ₹2 lakh, whichever is higher, plus confiscation of the goods or equivalent value.

The Core Document Set

Customs at major ports — Nhava Sheva, Mundra, Vizag — routinely flag scrap shipments for examination. The document stack that must be airtight includes: Shipping Bill (correctly endorsed under Free Shipping Bill for zero-rated supplies), commercial invoice with HS code and declared weight, packing list, test certificate or chemical analysis report from a BIS-recognised or NABL-accredited laboratory, IEC (Importer-Exporter Code) issued by DGFT, and — where applicable — MoEFCC consent for hazardous streams. For buyers in countries with Basel Convention obligations, a Movement Document under the Basel Convention framework may also be required by the importing country’s competent authority.

Export Pricing Benchmarks: LME, Indian Yard Rates, and the Margin Maths

Metal scrap export pricing in India is almost universally benchmarked against the London Metal Exchange (LME) for non-ferrous streams, with a discount to LME cash prices that reflects grade, contamination level, and logistics costs. For ferrous scrap, the international reference is typically the Turkish import parity price (CFR Turkey HMS 1&2 80:20 mix) or the Bangladesh import price, both of which are quoted in US dollars per tonne.

Scrap Category	HS Code	Domestic Yard Rate (Q1 FY26, Mumbai)	Indicative Export FOB (USD/MT)	Export Status (FTP 2023)
MS / HMS Ferrous Scrap	7204.49	₹33–₹37/kg	$310–$340/MT	Free (subject to policy review)
Cast Iron Scrap	7204.10	₹28–₹32/kg	$270–$300/MT	Free
Copper Scrap (Birch / Cliff grade)	7404.00	₹430–₹460/kg	$4,800–$5,200/MT	Free
Aluminium Scrap (Taint/Tabor)	7602.00	₹120–₹135/kg	$1,350–$1,500/MT	Free
Lead Scrap (clean)	7802.00	₹140–₹155/kg	$1,600–$1,750/MT	Restricted (Basel check required)
Stainless Steel Scrap (304 grade)	7204.21	₹80–₹92/kg	$900–$1,050/MT	Free

Note: Rates are indicative for Q1 FY 2025-26 and are indexed to LME cash prices and INR/USD exchange rate. Actual export realisation depends on freight, port handling charges (typically ₹800–₹1,200/MT at Nhava Sheva), and buyer credit terms. Always verify current DGFT export status before booking.

The margin arithmetic on ferrous scrap export is tighter than non-ferrous. At current HMS prices of roughly $320/MT CFR Bangladesh and a port handling plus freight cost of $28–$35/MT, the effective FOB realisation for a Mumbai-based exporter translates to approximately ₹24,000–₹26,000/MT — marginally above domestic spot in a flat market, but genuinely attractive when domestic demand softens or quality-grade premiums are available from international buyers. Copper and aluminium exports, by contrast, command substantially better margins given the LME premium over Indian secondary market prices.

Key Export Destinations and the 2024–25 Demand Shifts

Bangladesh remains the most significant regional buyer of Indian ferrous scrap, with its re-rolling mills in Chittagong drawing heavily on material from Kolkata, Haldia, and eastern Indian yards. Nepal’s steel sector, though smaller, imports light melting scrap through the land border at Raxaul and Jogbani. These land routes involve a separate set of customs and FEMA documentation requirements compared to sea freight.

The UAE — particularly the Hamriyah Free Zone in Sharjah — functions as a processing and re-export hub for mixed non-ferrous scrap. Indian exporters in Bhavnagar, Muzaffarnagar, and Moradabad have traditionally maintained buyer relationships in the Gulf for brass scrap, copper wire scrap, and aluminium extrusion scrap. Post the Abraham Accords and the India-UAE Comprehensive Economic Partnership Agreement (CEPA), signed in February 2022 and in force from May 2022, tariff structures on scrap trade between the two countries improved, making the UAE route commercially more attractive. South-East Asian markets — Vietnam, Indonesia, Malaysia — have also been absorbing Indian copper and aluminium scrap, drawn by their growing secondary smelting capacity.

One structural trend worth tracking: the EU’s Carbon Border Adjustment Mechanism (CBAM), which entered its transitional phase in October 2023, covers steel and aluminium. While CBAM targets primary and semi-finished products rather than raw scrap directly, its downstream effect on European steel demand and scrap premium pricing is already influencing global scrap flows, including re-routing of some high-quality Indian scrap towards European buyers who value the lower-carbon footprint of recycled feed. For Indian exporters with the documentation to certify material origins and process chain, this is an emerging premium segment worth monitoring. The NITI Aayog’s circular economy framework has also flagged scrap export value addition as a priority within India’s broader material efficiency goals.

The 7-Step Compliance Checklist for Metal Scrap Exporters

The following checklist reflects what a well-prepared scrap exporter should have in place before executing the first shipment of any financial year. It is not exhaustive legal advice, but it covers the failure points that customs, GST authorities, and FEMA enforcement most commonly probe.

1. Verify current DGFT export status: Check the ITC(HS) Schedule II for your specific HS code on the DGFT portal before every shipment cycle. Export restrictions on ferrous scrap have been imposed and lifted with minimal notice; a “Free” status today is not guaranteed tomorrow.
2. File your LUT for the financial year: Submit the Letter of Undertaking under Rule 96A of the CGST Rules, 2017 on the GST portal before the first export of FY 2025-26 (or whichever year applies). Confirm the ARN (Acknowledgement Reference Number) with your AD bank.
3. Conduct a hazardous waste classification check: Cross-reference your scrap stream against Schedule I, II, and III of the Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016. If any hazardous criteria are met, do not ship without MoEFCC consent.
4. Obtain a laboratory test certificate: Get a chemical analysis or material composition report from a NABL-accredited laboratory. This is increasingly required by importing countries’ customs and is your primary defence against confiscation for mis-declaration at Indian ports.
5. Confirm your IEC is active and updated: Importer-Exporter Codes issued by DGFT must reflect your current registered address and bank details. An IEC with mismatched details triggers holds at the shipping bill stage.
6. Set up FEMA repatriation tracking: Instruct your AD bank to set calendar alerts for the nine-month repatriation deadline from each shipment date. For buyers on LC terms, confirm the LC is issued by a scheduled bank and the proceeds routing complies with RBI Master Direction on Export of Goods and Services.
7. Prepare BRSR-grade export records: Large listed exporters and those supplying to ESG-conscious buyers increasingly need to demonstrate material traceability and recycled-content documentation. Maintain weight certificates, source generator records, and certificate-of-recycling documentation as part of your export dossier — this is now a procurement filter, not a voluntary disclosure.

Related Articles

• Why Circular Economy Matters for Indian Manufacturers
• How to Start a Scrap Dealer Business in India: Licensing and Setup
• How ESG Reporting Is Changing Corporate Scrap Disposal in India

Frequently Asked Questions

Is a licence required to export ferrous scrap from India?

Under the Foreign Trade Policy 2023, most ferrous scrap categories (HS 7204) are listed as “Free” for export, meaning no specific export licence is required under normal conditions. However, exporters must hold a valid Importer-Exporter Code (IEC) issued by DGFT, and must comply with GST, FEMA, and — where applicable — the Hazardous and Other Wastes Rules, 2016. Export restrictions can be imposed by DGFT via notification at short notice; the 2022 temporary ban on certain steel scrap exports is a precedent exporters must track.

Which metal scrap categories are treated as hazardous under Indian law?

Under the Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016, scrap streams such as lead-acid battery scrap, lead dross, certain copper smelting slags, and e-waste-derived metals can meet the hazardous classification criteria in Schedule I, II, or III. The CPCB’s hazardous waste portal maintains the current Schedule. Export of hazardous waste for recovery requires prior informed consent from MoEFCC and the receiving country’s competent authority, consistent with India’s Basel Convention obligations. Exporting without consent carries penalties including imprisonment up to five years.

How does GST apply to metal scrap exports?

Metal scrap exports are classified as a zero-rated supply under Section 16 of the IGST Act, 2017. Exporters have two options: export under a Letter of Undertaking (LUT) filed under Rule 96A of the CGST Rules, 2017 without paying IGST and claim ITC refunds, or pay IGST at 18% on export and claim a full refund post-shipment. The LUT route is preferred by volume exporters. The LUT must be filed fresh on the GST portal at the start of each financial year; an expired or un-filed LUT converts a zero-rated transaction into a taxable one.

What is the deadline for repatriating export proceeds under FEMA?

Under the Foreign Exchange Management Act, 1999 (FEMA) and the RBI’s Master Direction on Export of Goods and Services (2016, as updated), export proceeds must be realised and repatriated to India within nine months from the date of shipment for most goods exported by sea or air. Failure to meet this deadline requires a specific application to the AD bank and, in larger cases, reporting to the RBI. Penalties under FEMA can reach up to three times the amount involved, making timely repatriation tracking a treasury priority, not an afterthought.

What documentation does customs check for scrap export shipments?

Indian customs at ports including Nhava Sheva, Mundra, and Vizag routinely subject scrap shipments to document examination and physical checking. The core set includes: a correctly classified Shipping Bill, commercial invoice with declared HS code and net/gross weight, packing list, NABL-accredited laboratory test certificate confirming material composition, a valid IEC, and GST LUT Acknowledgement Reference Number. For hazardous streams, MoEFCC consent is mandatory. Under the Customs Act, 1962, mis-declared goods are liable to confiscation and fines up to three times their market value under Sections 111 and 114 respectively.

Work With The National Recycling Corporation

Whether you are a large industrial generator looking to monetise surplus metal scrap through the export channel, or a trading company seeking a verified pan-India aggregation partner with clean documentation, The National Recycling Corporation is equipped to support your requirements end to end.

We source, grade, and supply ferrous and non-ferrous scrap from across Maharashtra, Gujarat, Delhi-NCR, Tamil Nadu, and Karnataka. Our supply chain is built on GST-compliant invoicing, transparent weight certification, and NABL-referenced material test reports — precisely the documentation that customs, international buyers, and ESG auditors increasingly demand. For buyers requiring BRSR-grade supply chain disclosure, we maintain generator-level traceability records. Our pricing is benchmarked against LME cash prices for non-ferrous and international parity indices for ferrous, so you are not negotiating blind. Explore our full range of ferrous and non-ferrous metal recycling services, or see the broader scope of scrap categories we purchase across India.

For industrial clients decommissioning plant or managing ongoing scrap streams, we offer structured pickup scheduling, material segregation, and — where your scrap stream intersects with regulated waste categories — guidance on the correct compliance pathway under the Hazardous and Other Wastes Rules, 2016. Contact us to discuss your export-grade scrap supply requirements or to schedule an assessment.

• Pan-India scrap aggregation and logistics across 12+ states
• GST-compliant tax invoicing for every transaction
• Material test certificates and grade certification for export documentation
• LME-benchmarked, transparent pricing for copper, aluminium, lead, and ferrous streams
• BRSR-grade material traceability documentation for ESG and audit purposes
• Support for hazardous waste classification queries and compliance routing

Sources and References

• Directorate General of Foreign Trade (DGFT) — Foreign Trade Policy 2023 and ITC(HS) Schedule II
• Ministry of Environment, Forest and Climate Change (MoEFCC) — Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016
• Central Pollution Control Board (CPCB) — Hazardous Waste Management Portal and Schedule of Hazardous Wastes
• Ministry of Steel, Government of India — Scrap Policy and Domestic Steel Sector Data
• GST Portal, Government of India — HSN Classification and LUT Filing (Rule 96A, CGST Rules 2017)
• NITI Aayog — Circular Economy and Material Efficiency Policy Framework
• London Metal Exchange (LME) — Non-Ferrous Metal Cash Price Benchmarks
• MSTC Ltd — Government Scrap Auction Portal and Trade Data