AAI seeks govt for not imposing anti-dumping duty on caustic soda import

“At this juncture with revival of economy and post pandemic industrial activity back on track, any further restriction on one of the major raw materials for Aluminium will hamper the economic viability of Indian Aluminium industry to the extent of closure of operations thereby affecting the overall economy,” said AAI

“The burden of any additional tariffs will be detrimental for the sustainability and cost competitiveness of the Aluminium industry as unlike other industries, it cannot pass through the burden of escalated cost to the end consumers as the global Aluminium prices are governed by London Metal Exchange," added AAI.

According to the AAI, caustic soda imports are already restricted in India due to a variety of tariff and non-tariff restrictions, including the requirement to use the Standard Mark under a licence from the Bureau of Indian Standards and conformance to BIS Standards.

Because they did not get the required BIS licence for exporting Caustic Soda to India after the installation of the necessary BIS licence for Caustic Soda imports, over 95% of international Caustic Soda manufacturers have already been removed. According to AAI, the BIS Requirements are a substantial non-tariff trade barrier in place to protect the domestic Caustic Soda business and decrease Caustic Soda imports based on quality standards.

According to the organisation, India's Caustic Soda manufacturing and consumption centres are spread across the country. The Western area of India, including Gujarat, Maharashtra, and Rajasthan, produces the majority of India's domestic Caustic Soda (Non-Captive) output. Whereas all of the country's main alumina producers are concentrated in the east (Odisha, Andhra Pradesh, Jharkhand, Karnataka, etc.).

"This creates a huge logistics challenge resulting in high freight costs for transportation from western to eastern regions along with unavailability of sufficient rakes and network congestions. The transportation through road mode is also not feasible over such long distances. As a result, the domestic suppliers have concentrated their supplies in the geographies near to their plant location," added AAI.

According to AAI, the domestic caustic sector is unable to meet the bulk requirements of the aluminium industry, which requires big shipment quantities ranging from 8000 DMT to 10000 DMT, which local suppliers are unable to provide. As a result, local customers have little choice but to import caustic soda to suit their needs, according to AAI.