Aluminium producers in India have urged the government to raise the import duty on aluminium scrap to 7.5 per cent from the current 2.5 per cent in the upcoming budget. This move is aimed at curbing the influx of sub-standard materials and protecting the domestic industry, which employs over 10 lakh people.
In a representation to the finance minister, the Aluminium Association of India (AAI) also advocated for maintaining the duty on primary aluminium imports at the current rate of 7.5 per cent, with a possible marginal increase to 10 per cent.
This recommendation includes downstream products to shield the domestic market from an inundation of cheap imports.
Despite adequate domestic production, primary aluminium imports have surged, showing a 30 per cent year-on-year increase, driven by imports from China and free trade agreements with the Association of Southeast Asian Nations (Asean) and Middle Eastern countries. This surge impacts the viability of micro, small and medium enterprises (MSMEs) involved in downstream production.
"Imports fulfilled 55 per cent of the country's aluminium demand in FY24, while the share of domestic producers fell from 60 per cent in FY11 to 45 per cent in FY24. Alarmingly, low-quality foreign scrap, which poses safety and environmental risks, has surged from 472 kt in FY11 to 1,768 kt in FY24, a 274 per cent increase," said AAI in its statement.
