The Director General of Foreign Trade (DGFT) at the Ministry of Commerce & Industry has been reached out by the Aluminium Association of India (AAI), asking them to remove aluminium and its products from the recent government notification. This took effect immediately, slashing the Remission of Duties and Taxes on Exported Products (RoDTEP) rates by 50 per cent.

The industry organisation mentioned that aluminium production facilities within Advance Authorisation (AA) holders, Export Oriented Units (EOUs) and the Special Economic Zones (SEZs) were included in the RoDTEP scheme until February of this year. With the current global trade uncertainties, the AAI has emphasised the pressing need to extend the RoDTEP scheme’s coverage for exports from aluminium producers situated in AA, EOU and SEZ units.

The association’s appeal to the DGFT included a request that the export products classified under ITC HS Chapter 76 (Aluminium and Articles thereof) should be excluded from the notification issued on February 23, 2026. This request mirrors the exemption already provided for products under ITC HS Chapters 01–24.

Additionally, the association has further urged for the announcement of RoDTEP rates for FY 2026–27, reflecting the actual unrebated tax burdens faced by the aluminium sector, applicable to both Domestic Tariff Area (DTA) and SEZ units.

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The RoDTEP scheme, started in 2021, aimed to refund taxes, duties and levies that exporters face while manufacturing and distributing goods, especially those costs that are not covered by any other programs at the central, state, or local levels. The refunds offered through this scheme vary between 0.3 per cent and 3.9 per cent. For the budget year 2025–26, the allocation was set at INR 18,232 crore (USD 2.0 billion), with a proposal to bump it up to INR 21,709 crore (USD 2.35 billion) in 2026–27. However, the actual budget that was allocated turned out to be INR 10,000 crore (USD 1.08 billion).

Following this, the government also announced a significant cut in its RoDTEP rates, slashing them by a flat 50 per cent across all sectors, effective immediately. Before this, the RoDTEP rates for aluminium exports stood at around 3 per cent for Domestic Tariff Area (DTA) units and 2.2 per cent for SEZ units.

The association also brought to light that the country's aluminium exports, which are about USD 7 billion and nearly 2 per cent of the country’s total goods exports, are under increasing strain from rising tariff and non-tariff barriers in major markets. Alongside this, the domestic aluminium sector is facing challenges, as export opportunities dwindle due to stricter global tariff policies, while imports into India are surging sharply.

AAI flagged that more than USD 20 billion has been poured into boosting domestic production and the country has now become the second-largest aluminium producer in the world, boasting an annual capacity of 4.1 million tonnes. Almost 45 per cent of the country’s aluminium exports come from units based in AA/EOU/SEZ. Additionally, the association warned that any delays could put Indian industries at risk of facing the fallout from global trade uncertainties, which might result in significant production cuts, job losses, and stunted domestic growth.

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Carbon Border Adjustment Mechanism (CBAM) by the European Union implies an indirect tariff barrier that ranges from 7 per cent to 50 per cent. But the exports to the US continue to face 50 per cent duties due to Section 232 tariffs.

Moreover, Mexico plans to raise customs duties on aluminium products to between 10 per cent and 35 per cent starting January 2026. Uplifting the severity of the situation, the increasing aluminium production capacities funded by China in Indonesia are ramping up competition in global markets.

As pointed out by the association, the aluminium industry has provided detailed information and proposed to the committee the recommended RoDTEP rates. The report submitted includes the actual degree of unrebated taxes on exported aluminium products, which is about 8–9 per cent of the FoB value for Domestic Tariff Area (DTA) units and around 6–7 per cent for SEZ units.

AAI emphasised that granting an exemption for aluminium exports would be crucial in helping Indian producers stay competitive in the global market.

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