Indian aluminium industry urges again for higher import duty. Will the government pay ears?

The Indian aluminium industry has once again knocked the government to remind about the increase of import duties on primary and downstream aluminium and to raise customs duty on aluminium scrap to restrict the inflow of low-quality scrap into the country.

This urge to the government time and again is essential in the background of skyrocketing primary aluminium and low-grade scrap imports, particularly from countries with excessive production capacity like China, causing the domestic market to fight against uncompetitive prices and impeding investments in local production.

In July 2024, ahead of the Union Budget, Indian aluminium producers had asked for an import duty hike on aluminium scrap to 7.5 per cent from the present 2.5 per cent. For primary aluminium, the demand was an import duty of 10 per cent instead of 7.5 per cent, and for downstream aluminium, 12.5 per cent.

Meanwhile, the Federation of Indian Mineral Industries (FIMI) also demanded the same from the government – 12.5 per cent import duty on downstream/primary aluminium and 7.5 per cent on scrap.

In addition, the Aluminium Association of India (AAI) also sought a rationalised duty structure for essential raw materials to give domestic manufacturers access to low-priced raw materials and reduce their production costs.

In October 2024, the Aluminium Association of India (AAI) justified its urge for higher import duty on primary/downstream metal and lower tariffs on raw materials by explaining the strategic role of the silvery-white metal in India's economic development, citing its widespread applications across defence, aerospace, renewable energy, and electric vehicles.

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

Now, it is to see if the Indian government pays ears to the persistent yearning of the association for restructured import duties on aluminium. Will they?