India is one of the world's largest importers of metal scrap. Induction furnaces, electric arc furnaces, foundries, aluminium smelters and copper refiners all rely on imported scrap to supplement domestic supply. For mills and traders, imports can offer consistent grades and competitive prices. But scrap is a regulated import: getting documentation, inspection or classification wrong can leave containers stuck at port, accumulating demurrage. This guide walks through the process step by step.
This article is general guidance. Import rules, notifications and agency lists change. Always confirm current requirements with DGFT, customs and a licensed customs broker before shipping.
Who imports scrap into India?
- Steel mills and induction furnaces: HMS 1 and 2, shredded scrap, plate and structural (P&S), bundles.
- Foundries: Cast iron, rail and specific ferrous grades.
- Aluminium smelters and die-casters: Tense, Taint/Tabor, Zorba, UBC, extrusion scrap.
- Copper and brass units: Barley, Berry/Candy, Birch/Cliff, Honey and mixed grades.
- Stainless steel melters: 304 and 316 solids and turnings.
- Traders: Aggregating imports for multiple smaller consumers.
Step 1: Obtain an Importer-Exporter Code (IEC)
Every importer needs an IEC from the Directorate General of Foreign Trade (DGFT). It is linked to your PAN and is obtained online. Without an IEC, customs will not clear your goods.
Step 2: Understand the policy for your scrap
Metal scrap imports are governed by:
- The Foreign Trade Policy and ITC(HS) import schedule, which sets the import policy for each HS code and conditions such as pre-shipment inspection.
- Hazardous and Other Wastes (Management and Transboundary Movement) Rules, which regulate the import of certain wastes and set conditions for metal scrap.
- Customs regulations, covering classification, valuation and duties.
Most common metal scrap grades are importable subject to conditions, the most important of which is pre-shipment inspection.
Step 3: Pre-shipment inspection certificate (PSIC)
For metal scrap, a pre-shipment inspection certificate is required from an inspection agency recognised by DGFT (a PSIA). The PSIC certifies, among other things, that:
- The consignment does not contain arms, ammunition, explosives, mines, shells or other hazardous items.
- It is free from radioactive contamination, based on radiation checks.
- The material matches the description and is in the declared form.
Important points:
- Only agencies on DGFT's current recognised list can issue a valid PSIC. DGFT adds and removes agencies from time to time; in recent years it has both delisted agencies and enlisted new ones.
- The PSIC must relate to the specific consignment and be valid at the time of shipment.
- Inspection usually includes photographs and video of container stuffing.
Before signing a contract, ask your supplier which PSIA they will use and check that it is on DGFT's current list.
Step 4: Draft a strong contract
A good scrap import contract covers:
- Grade and specification: For example, HMS 1&2 80:20 as per ISRI 200–206, with permitted contamination limits.
- Quantity and tolerance: Per container and per contract.
- Price and Incoterm: Commonly CFR to a named Indian port.
- Inspection: PSIC by a named DGFT-recognised agency; optional independent inspection at loading.
- Weight terms: Basis of final weight (loading port or discharge port), and tolerance for weight differences.
- Payment: Letter of credit, CAD (cash against documents), or advance with balance against documents.
- Claims: Procedure and time limit for quality or weight claims.
- Shipment period and penalties.
Step 5: Shipping and documents
Typical documents you should receive:
- Commercial invoice.
- Packing list with container-wise weights.
- Bill of lading.
- Pre-shipment inspection certificate (PSIC).
- Radiation certificate (often part of or alongside the PSIC).
- Certificate of origin, where relevant.
- Supplier's declarations required by Indian rules.
Check every document carefully against the contract before the vessel arrives. Errors in names, weights or HS codes cause clearance delays.
Step 6: Customs clearance
At the Indian port or inland container depot (ICD):
- Your customs broker files the bill of entry with HS classification and value.
- Customs may examine containers, including radiation screening at many ports.
- Applicable duties and taxes are assessed and paid (basic customs duty, if any, plus IGST and other levies as applicable at the time).
- On clearance, containers are released for delivery.
Duty rates on scrap have been changed several times in Union Budgets. Check current rates for your HS code at the time of import.
Step 7: Inland delivery
From port, scrap moves to your plant by road or rail. For mills in eastern India, eastern ports such as Kolkata and Haldia are often closer; western ports such as Nhava Sheva and Mundra may offer more vessel options but longer inland freight. Factor in:
- Container detention charges.
- Destuffing at port or delivery of full containers to plant.
- Weighbridge weighment on arrival.
- E-way bills for the domestic leg.
Calculating landed cost
To compare imports with domestic scrap, calculate landed cost per tonne:
| Cost element | Example notes |
|---|---|
| CFR price (USD/t × exchange rate) | Contract price converted to rupees |
| Customs duties and levies | As applicable at time of import |
| Port charges and CFS | Handling, storage, documentation |
| Customs broker fees | Per bill of entry |
| Inland freight | Port to plant |
| Container detention | If containers are delayed |
| Finance cost | LC charges, interest on funds |
| Weight and yield loss | Difference between invoiced and received yield |
Remember that IGST paid on import is generally available as input tax credit if you are a registered manufacturer using the scrap in your business, which affects your cash flow but not usually your final cost.
Common risks and how to manage them
- Wrong grade or excessive contamination: Use detailed specifications, independent inspection and claim clauses.
- Weight shortage: Agree the weight basis and tolerance; weigh on arrival.
- Invalid PSIC: Verify the agency is on the current DGFT list.
- Hazardous items or radiation: Rely only on reputable suppliers and PSIAs; customs radiation screening is strict.
- Currency risk: Consider hedging for large contracts.
- Demurrage: Keep documents ready before vessel arrival.
Should you import directly or through a partner?
Large mills with in-house trade teams often import directly. Smaller mills and foundries may find it easier to work with a partner who aggregates demand, negotiates with overseas suppliers, checks PSIA validity, coordinates customs and delivers to plant. This reduces working capital needs and administrative load.
Import planning checklist
- IEC active and linked to the correct GST registration.
- HS code and current import policy confirmed for each grade.
- Supplier vetted: trade references, past shipments, bank details verified.
- PSIA named in the contract and checked against DGFT's current list.
- Specification, weight basis, tolerance and claims process agreed in writing.
- Payment instrument arranged (LC or agreed advance terms).
- Customs broker appointed and documents reviewed before vessel arrival.
- Inland transport, container return and receiving weighbridge planned.
- Landed cost worked out per tonne of usable metal, not just per tonne shipped.
Mistakes first-time importers make
Booking with a supplier whose inspection agency has been delisted, agreeing to loading-port weights without a tolerance, underestimating port and inland costs, and paying a large advance to an unverified supplier are the most common and expensive errors. A short checklist and a trusted partner prevent all four.
How Kabadi24 helps importers
Kabadi24's trade desk at our Ramnagar, Varanasi head office supplies imported HMS, shredded, cast iron, aluminium, copper, brass and stainless scrap to mills and foundries across India. Through the Kabadi24 marketplace, buyers can post import requirements with grade, volume and delivery location. We coordinate supplier selection, inspection, documentation, port routing and inland delivery, and settle on weighbridge weight at your plant.
Conclusion
Importing scrap into India is routine for many mills, but it rewards careful preparation: a valid IEC, a PSIC from a currently recognised agency, clear contract specifications, complete documents and realistic landed-cost calculations. With the right partners, imports can provide steady, quality raw material at competitive cost.