Aluminium giants, among other metal businesses in India, reportedly plan to expand rapidly and vigorously to support domestic demand. The transformation in business strategy for these metal producers comes as two major factors weigh in — the US tariff creating international price volatility and India’s domestic market touching the demand sky. Aluminium and steel companies alike face the headwind of a 25 per cent tariff imposed on all aluminium and steel imports to the US. Producers like Vedanta, Nalco, and Hindalco are thus tallying a reroute through trade in the domestic market, eyeing the scope of withholding any potential business deterioration.
Key players like Vedanta, NALCO, and Hindalco are realigning their trade priorities to cushion any fallout from the tariff-led international price volatility. The shift comes at a time when India’s aluminium demand is expected to double every five years, fuelled by the government’s massive INR 11.21 lakh crore (USD 135 billion) allocation for infrastructure development in the 2025-26 budget. Industry estimates also peg aluminium demand growth at a 7.2 per cent CAGR till 2030.
Initially, the tariff announcement sparked a sell-off across metal stocks. But the tide may turn in favour of those with a strong domestic footprint.
“The sharp fall in metal stocks across the board was a knee-jerk reaction. Going forward, the market will favour companies that derive the bulk of their revenues from domestic operations. Here, companies like Vedanta, Hindustan Zinc, and NALCO stand out since they are largely focused on the Indian market and their revenues will be driven by India’s growth story. We thus expect stocks of these companies to do better going forward,” an analyst at a leading domestic brokerage told a national media outlet.
Vedanta Limited, whose business spans from aluminium to oil, has rolled out ambitious expansion plans that are aligned with India’s infrastructure, automotive, railways, and defence sectors. The company currently sells nearly 50 per cent of its aluminium output within India.
Vedanta Aluminium is ramping up its production capacity to 3 million tonnes and has acquired one of Odisha’s largest high-grade bauxite mines to support this scale-up. Its BALCO smelter expansion is nearing completion, with commissioning targeted in FY’26. The company also aims to grow its share of value-added aluminium products from the current 60 per cent to over 90 per cent, riding the wave of India’s booming construction and EV sectors.
Meanwhile, Hindalco Industries, another aluminium behemoth, announced at its recent investor day that it expects to commission projects in copper, e-waste recycling, and continuous copper cast rods within this fiscal year.
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