Aluminium industry seeks duty protection in Budget to check dumping

New Delhi: Facing a staggering 10 per cent compounded annual growth in imports over last decade, the Indian aluminium industry has sought immediate government intervention, by way of higher import duty of 10 per cent on aluminium scrap and metal, to protect domestic production.

In a set of pre-budget recommendations, the industry, represented by the Aluminium Association of India (AAI), has said that the challenges coming from rising imports, declining domestic market share, and increasing production and logistics costs need to be mitigated soon and in this regard, it is essential that the aluminium sector gets duty protection on imports of finished products and relief in case of raw materials.

Accordingly, the association has urged that the budget should increase the basic custom duty on primary aluminium and aluminium scrap to 10 per cent while reducing custom duty on critical raw materials for aluminium industry value chain like calcined and raw petroleum coke, caustic soda and alumina.

The industry is also expecting that the budget may eliminate cess on coal (GST compensation cess of Rs 400 per tonne) to support highly power intensive industries like aluminium.

"The challenges (for the industry) have been further compounded by the Covid-19 pandemic which has adversely impacted the domestic demand for aluminium. At the same time, the industry is not able to compete effectively in the global markets as the burden of Central & state taxes and levies amounting to 15 per cent of aluminium production cost puts the domestic industry in a significant disadvantage compared to its global peers," the AAI said in its pre-budget recommendations.

Indian has sufficient domestic capacity of 4.1 mtpa to cater to the country's aluminium demand of around 4 mtpa. Despite this, 60 per cent of India's demand is being met through imports, resulting in declining domestic market share from 60 per cent in FY11 to 40 per cent in FY20, the AAI had told the Finance Minister last year.