AAI urges duty safeguards, BIS scrap standards as India’s aluminium imports rise to 3.48 MTPA

Stock image for referential purposes only

The Aluminium Association of India (AAI) has urged the Ministry of Finance to strengthen safeguards for the domestic aluminium industry, citing shrinking export markets, rising imports and increasing global competition. In a representation to the Central Board of Indirect Taxes and Customs (CBIC), the association pointed to higher US tariffs, growing protectionism in Mexico, Indonesia's aluminium capacity expansion, Russian dumping and rising imports of low-quality aluminium scrap and aluminium products from Gulf and ASEAN countries as key challenges facing the sector.

The association said India should adopt quality standards for aluminium scrap similar to those followed by major global markets, where only high-quality scrap is accepted for imports. It added that a calibrated customs duty framework, along with the immediate notification of Bureau of Indian Standards (BIS) norms for aluminium scrap, would help protect domestic value addition while supporting quality-led recycling.

According to Ministry of Commerce data cited by the association, India's aluminium imports more than doubled from 1.53 million tonnes per annum (MTPA) in FY15 to 3.48 MTPA in FY26. During the same period, the import bill increased from INR 233.28 billion (USD 2.4 billion) to INR 884.34 billion (USD 9.2 billion). Aluminium scrap imports also rose sharply from 840,000 tonnes in FY15 to 2.03 million tonnes in FY26, resulting in a foreign exchange outflow of  INR 402 billion (USD 4.2 billion).

The association said, “To promote India’s circular economy goals of the secondary aluminium industry, it is important that the government establish a robust domestic scrap collection and recycling system.”  It said increasing domestic scrap availability would reduce dependence on imported scrap and help prevent the foreign exchange outflow associated with aluminium scrap imports.

To know the long-term bauxite market forecast, book our report: “Global Bauxite & Alumina Market Forecast to 2036: Supply–Demand, Trade Flows & Price Outlook”

AAI said major economies are protecting their domestic aluminium industries through higher import duties and other trade measures to attract investment, expand production capacity and reduce import dependence. It urged the government to retain the existing duty structure on aluminium products and consider increasing the basic customs duty and other trade measures to curb imports of low-quality aluminium scrap, citing countries such as the US, Canada and Mexico, where import duties range between 15 per cent and 50 per cent.

The association also requested the government to notify the pending BIS standard titled 'Aluminium & Aluminium Alloy Scrap – Requirements & Conditions of Delivery' without any changes, noting that it has already been approved by NITI Aayog and BIS. According to AAI, the standard would classify aluminium scrap into different grades based on aluminium content, ranging from above 95 per cent to below 60 per cent, helping prevent India from becoming a dumping ground for poor-quality and hazardous aluminium scrap.

AAI further recommended maintaining the current import duty on aluminium scrap until the BIS standards are notified and grade-wise Harmonised System of Nomenclature (HSN) codes are introduced. Once the new standards are in place, it is proposed to increase the import duty on lower-grade aluminium scrap (Grades 3 to 7) to 7.5 per cent to discourage imports of poor-quality material.