India: Continuing to Defy Description and Comparison

A visit to a number of Indian scrap metal processors reveals a reality very much at odds with the enthusiasm for the country’s development expressed at recent scrap conventions and by the international business media. Unlike in China, India’s scrap industry is decades old, and so are the methods it employs. The small scale of India’s scrap operations is seen not just as a matter of government regulation but also as the result of an enduringly conservative business culture.

Mumbai’s narrow Kika Street is jammed with delivery trucks, taxis and hundreds of ragged labourers carrying valves, wire spools and brass handicrafts on their heads and shoulders. Up and down the street, cattle-drawn carts weighed with copper bars compete for space with taxis, human-drawn carts loaded down with copper tubes, and delivery trucks, many of which are stopped dead for unloading in the middle of the street.  Merchants sit in tiny shop fronts packed with all varieties of finished and unfinished metal products, watching traffic and customers. 

Rohit Shah, President of the Bombay Metal Exchange, stops in front of the shallow shop front occupied by Shah Dipchand Kisnaji and Company. Copper wire spools occupy the upper part of the stall, and three men - representing three generations of the family that founded and operates the business - sit below them.  ‘They’ve been on Kika Street for 70 years,’ says Mr Shah. He continues along, stopping to say hello to a family that operates a tap shop, then another family that operates a religious handicraft shop, and then another family that operates a valve shop. Finally, we come to his own shop, which markets copper in a wide variety of widths, all of which can be cut to specified lengths in a back room. From there, he climbs several steep, dark stairways that lead to the Metal Exchange’s offices. Settling into his desk, he opens a photo album. ‘This is my copper smelter in Sri Lanka,’ he says. ‘Here I am with the President of Sri Lanka.’ He turns a page.  ‘And here’s my brother with the transformers he exported from the States.’

Misleading expansion

Despite the modest Kika Street shop and office, the reality is that Mr Shah is a major Indian non-ferrous scrap metal importer and processor, and his business is well-placed to take advantage of India’s rapidly expanding economy. Nevertheless, Mr Shah insists that, despite growing metal demand in India, the country’s economic expansion can be as misleading as his Kika Street shop. ‘India’s metal businesses are 20 years behind the rest of the world,’ he says with a shrug. ‘The technology is primitive, and the traders aren’t really ready for bulk business like China is doing with the USA and Europe.’

For now, at least, Mr Shah believes that success in India’s steadily expanding scrap import markets will continue to belong to market players well-versed in India’s unique niche markets, many of whom have been successful traders and importers for decades. ‘My priority is modernising my businesses, and my industry’s businesses,’ he says. ‘Otherwise, this industry has a limited future.

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