AAI calls for higher import duties & major investment to accelerate growth in the aluminium sector

The Aluminium Association of India (AAI) has proposed raising import duties and outlined an investment plan of ₹3 lakh crore to accelerate growth in the aluminium sector as part of its pre-budget recommendations to the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce.

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Increased import duties

AAI emphasised aluminium's strategic role in India's economic development, citing its wide applications across defence, aerospace, renewable energy, and electric vehicles. AAI has recommended increasing the import duty on primary and downstream aluminium products from 7.5 per cent to 10 per cent and setting a 7.5 per cent duty on aluminium scrap. "This would curb cheap imports, encourage domestic recycling, and boost the circular economy," said the association.

"With appropriate duty rationalisation and import controls, the aluminium sector can significantly contribute to India's self-reliance journey," the AAI asserted.

AAI reports that India's per capita aluminium consumption is currently 3 kg per year, significantly lower than the global average of 12 kg. To meet the anticipated rise in domestic demand, projected to reach 10 million tonnes annually by 2030, AAI estimates an additional ₹3 lakh crore (about $40 billion) will be needed over the next six years. The industry has already invested over ₹1.5 lakh crore ($20 billion) to boost production capacity to 4.2 million tonnes per annum (MTPA).

"Aluminium's role in critical sectors like defence and sustainable infrastructure makes self-sufficiency essential for India's growth," said an AAI representative. The association stressed that the surge in primary aluminium imports, which have doubled in recent years, is impeding fresh investments despite India's potential to become a global hub.

Rationalising duties

The AAI urged the government to rationalise duties on essential raw materials to maintain competitiveness, highlighting that the industry currently incurs approximately 17 per cent of its production costs in taxes and regulatory charges.

AAI emphasised that current investments in the aluminium sector have generated over 800,000 direct and indirect jobs and supported more than 4,000 SMEs in rural areas. The proposed ₹3 lakh crore investments could add another 2 million jobs, supporting the government's "Atmanirbhar Bharat" initiative.