India-China tensions: India Government mulling measures to curb aluminium imports from China

According to a recent report, India has started contemplating various measures to minimise the aluminium imports as metal shipments from China have marked a sharp hike. Ministry of Mines has formed an Inter-Ministerial Committee (IMC) to examine ways to trim aluminium imports and prop up domestic smelters to substitute overseas supply.

As per the report, the government departments in New Delhi are discussing possible measures to restrict cheap and low-quality Chinese products, in line with the rising border tensions between India and China.

China accounts for 16 per cent of the metal imports to India. Other countries that supply the metal to India are the United States, Malaysia, the United Kingdom, and the United Arab Emirates.

According to a survey, more than 60 per cent of India’s aluminium demand is met through imports. Industry estimates suggest that 95 per cent of imported pressure cookers available in India are made in China. Also, 98.4 per cent of non-stick aluminium utensils, 91.6 per cent of aluminium utensils, and more than 96 per cent of aluminium sanitary are supplied by the same country.

Besides being responsible for analysing aluminium import trends and providing the correct line of action, the inter-ministerial panel will look at ways to substitute imports and discuss avenues to impose antidumping duties.

In the financial year 2019, India’s aluminium imports from China had grown by 58 per cent to 380 kilo tonnes from 238 kilo tonnes in FY2018. The trade deficit between the two emerging Asian economies on the metal had also widened by a whopping 369 per cent from $248 million in FY11 to $ 1.16 billion in FY2019.

Additionally, China has almost 80 per cent share of India’s secondary aluminium products, which include foil, tubes, doors, windows, nails, staples, screws, and so on. The Aluminium Association of India has, thus, suggested the government to levy 12.5 per cent import duty on secondary aluminium products from China. The association has also recommended an increase in basic customs duty on primary aluminium imports from 7.5 per cent to 10 per cent.

Similarly, 10 per cent hike in customs duty has been sought for aluminium scrap and waste, which has seen an unprecedented surge in imports due to the low custom duty of 2.5 per cent.

Scrap imports have increased from countries like the US, the UK, the UAE, Saudi Arabia, and Australia as well.