Indian Government may address inverted duty structure for aluminium goods in the Union Budget 2025-26

According to a report, the Indian Government may consider addressing the issue of inverted duty structure for some products in the aluminium sector in the forthcoming Union Budget for the fiscal year 2025-26. The news came on December 11 after an official said the government would revisit the inverted duty structure to protect and boost domestic manufacturing.

Inverted duty structure refers to a situation where the domestic industry pays a higher cost for raw materials in terms of duty while the finished products land at lower duty and cost, leading to credit accumulation and compounding expenses.

The Indian aluminium industry already knocked the government in mid-November to remind them about increasing import duties on both primary and downstream aluminium products. The demand is a 10 per cent import duty on primary aluminium and a 12.5 per cent tariff on downstream products instead of the existing 7.5 per cent.

For raw materials, the industry seeks a cut in the duty on calcined petroleum coke from 7.5 per cent to 2.5 per cent, on raw petroleum coke from 10 per cent to 2.5 per cent, and on aluminium fluoride from 7.5 to 2.5 per cent.

The Union Budget for 2025-26 is scheduled for February 1, 2025.