Annual increase in India’s aluminium scrap imports justifies AAI’s demand for 10% customs duty

India’s aluminium scrap imports from the United States recovered in August 2023 by 2,300 tonnes or 5.36 per cent month-on-month to stand at 45,200 tonnes, according to the US Geological Survey data.

The imports in July fell by 3,700 tonnes or 8.62 per cent to 42,900 tonnes, as a continuation of M-o-M decline in June from 48,100 tonnes to 46,600 tonnes, showed USGS survey.

On a year-on-year calculation, India’s aluminium scrap imports from the United States in August’23 stood 1.95 per cent lower than 46,100 tonnes. However, the country’s total imports from January to August 2023 registered a rise of 5,000 tonnes or 1.59 per cent from 314,000 tonnes to 319,000 tonnes.

The year-to-date increase in India’s aluminium scrap imports from the United States indicates the country’s need for secondary aluminium. India’s growing appetite for aluminium is largely dominated by recycled metal which is zoomed at a CAGR of 9-11 per cent from fiscal 2015 to 2023.

Due to the rise in India’s aluminium scrap imports, the Aluminium Association of India has urged for an immediate implementation of a 10 per cent customs duty on aluminium scrap imports. The objective is to safeguard the domestic metal industry from low-quality scrap dumping.

According to the apex body representing aluminium producers, the current 2.5 per cent customs duty on aluminium scrap has led to a rise in overall aluminium imports by 24 per cent from the previous financial year, resulting in a forex outgo of US$7 billion or INR 56,291 crore.

According to Volza, India is the largest importer of aluminium scrap in the world, securing mostly from the United States, Saudi Arabia, and United Arab Emirates. Volza’s India import data also found that India’s aluminium scrap imports stood at around 506.9 thousand tonnes as of October 31, 2023, imported by 3,453 importers from 14,928 suppliers.

Top 3 product categories of aluminium scrap imports in India are:

• HSN Code 76020010 : 76020010
• HSN Code 72044900 : 72044900
• HSN Code 76020090 : 76020090