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The Aluminum Association of India (AAI) has called upon the Union government to increase the import duty on aluminum scrap. The move is aimed at protecting the domestic industry, foreseeing the possible chances of U.S. aluminum scrap being redirected to India in the event of China imposing heavy import duties on imports of the metal and scrap.
Currently, 30% of China’s aluminum scrap imports are sourced from the U.S. China had recently declared that it plans to impose 25% duty on the metal imports from the U.S, in retaliation to the 25% duties imposed by the U.S. administration on $34 billion worth of imports from China.
As the current duty on aluminum metal and scrap imports in India stands lower at 7.5% and 2.5% respectively, there exists the possibility of U.S aluminum scrap flowing to India. Hence, as a precautionary measure, the AAI proposes to raise the import duty on both aluminum scrap and the primary metal to 10%. In connection with this, a delegation of Association members had recently met Ramesh Abhishek, Secretary of the Department of Industrial Policy and Promotion (DIPP).
According to AAI, the country is currently producing sufficient amount of the metal required to meet domestic demand. The domestic consumption by various industries, including automobile, construction, consumer goods etc. amount to nearly 3.6 million tonnes per annum (mtpa), whereas the country possess a higher capacity of 4 mtpa. As a result, any jump in metal imports will ruin the domestic aluminum industry, AAI noted. Incidentally, India had reported significant jump in aluminum exports during the previous fiscal year.
The rise in imports is already threatening the survival of the domestic aluminum industry. Over the past seven years, the imports of total aluminum have skyrocketed by 100%. Also, aluminum scrap imports have surged by nearly 98% over this period. The key domestic primary aluminum makers such as Hindalco, Nalco and Vedanta had earlier demanded the Finance Minister to increase the basic customs duty in the Budget.