The Aluminium Association of India has sought an increase in import duty on aluminium products and scrap to 10 per cent and a reduction in clean energy cess in the coming Union budget.
At present the custom duty on primary aluminum is 7.5 per cent and that of aluminum scrap is 2.5 per cent. According to the association, India’s domestic aluminium capacity is estimated at 4.1 million tonnes per annum (mt) which is sufficient to cater to the domestic demand of around 3.4 mtpa. The country currently imports 2.1mt of aluminum resulting in an overall forex outgo of Rs 30,000 crore.
The share of scrap in total imports has also increased from 52 per cent in 2015-16 to 66 per cent in 2020-21.
This is also coupled with a rise in input cost of raw materials, escalating ocean freights and logistics cost and a coal supply crunch.
“This is the reason why despite having a significant presence of primary aluminum capacity and potential to generate sufficient domestic scrap, India’s consumption of scrap is 100 per cent import dependent,” the association said in a statement.
“There is a need to urgently look at the duty structure. The basic customs duty is not in line with other non-ferrous metals like zinc, lead, nickel and tin which is a disadvantage for domestic aluminum producers,” the statement said.
The association has also called for a reduction in cess on coal which has been increased from Rs 50 per tonne in 2010 to Rs 400 per tonne which has an impact on the cost of production for the manufacturers.
According to the domestic industry, aluminum will play a key role in growth of electric vehicles, renewables, modern infrastructure, energy efficient consumer goods and in strategic sectors such as aerospace and defense resulting in an industry growth potential of 10 per cent.