Aluminium producers ask govt to hike import duties to fight dumping, spur investments
- The Aluminium Association of India wants the government to increase the import duty on primary/downstream aluminium products from 7.5% to 10% and the duty on aluminium scrap from 2.5% to 7.5%.
The aluminium industry has urged the government to raise the basic customs duty on primary aluminium and aluminium scrap to prevent it from being dumped in the Indian market. Aluminium dumping is deterring new investments in the sector, an industry body said, even as India has all the ingredients to be a global aluminium hub.
In it’s pre-budget representation to the Department for Promotion of Industry and Internal Trade (DPIIT), the Aluminium Association of India (AAI), which represents India’s top aluminium producers, asked the union government to increase the import duty on primary/downstream products from 7.5% to 10% to ensure the nation’s self-sufficiency and attract new investments. It also asked for the import duty on aluminium scrap to be raised from 2.5% to 7.5% to bring it at par with other aluminium products and curb cheap imports.
AAI wrote in its pre-budget recommendations, “Over the past couple of years, imports of primary aluminium have doubled while there has also been a significant surge in low-quality scrap and downstream products, especially from China… The primary reason for the surge in imports is the low import duties on primary/downstream products and a prevalent duty difference between primary goods and scrap in aluminium. This is unlike other key non-ferrous metals, where the duty for scrap and primary is at par.”
High aluminium use is an established marker of advanced economies, as it’s used extensively in both modern and futuristic applications, AAI said in a statement. This has caused several nations such as the US, Malaysia and Indonesia to designate aluminium as a strategic sector.
Given this, and its extensive use in defence, aerospace and sunrise sectors such as renewables, electric vehicles, power transmission, and sustainable infrastructure, it is crucial for India to become self-sufficient in aluminium production, AAI added.
High tax burden
AAI said in its letter that to ensure India’s global competitiveness, it is essential that policies nurture a sustainable environment, fostering growth for the domestic industry while positioning India as a leader in the global market. This will provide some relief to the industry, already burdened by high tax and regulatory charges, the association said. Taxes, levies, and regulatory compliance charges currently work out to 17% of the cost of production for aluminium producers, it said.
The industry association added that the domestic aluminium industry’s existing investments in capacity have led to the creation of more than eight lakh direct and indirect jobs and spurred the development of more than 4,000 small and medium enterprises (SMEs) in remote regions, particularly in downstream sectors.
Also read: Can Nalco beat aluminium price fluctuations?
According to industry estimates, India’s per-capita consumption of aluminium is still around 3 kg a year, a quarter of the global average of 12 kg. The sector faces major challenges in attracting fresh investments even though domestic demand for aluminium is expected to touch 10 million tonnes per annum (MTPA) by 2030. So far, the Indian aluminium industry has invested more than ₹1.5 trillion ($20 billion), to expand production capacity to 4.2 MTPA and meet the growing demand. However, a further ₹3 trillion ($40 billion) of investments will be needed to over the next six years meet the expected demand of 10 MTPA and create more jobs in India.
According to AAI, an additional investment of ₹3 trillion to meet domestic demand would align with the prime minister's vision for an ‘Atmanirbhar Bharat’, while also creating two million job opportunities across the country.
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Business NewsIndustryAluminium producers ask govt to hike import duties to fight dumping, spur investments
First Published:28 Oct 2024, 07:10 PM IST
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