India aluminium industry submits budget wish list, seeks duty rejig

<p>In a recent submission to the government, the domestic aluminium industry body has sought supportive measures in the next Union budget, including increase in basic customs duty on aluminium products from 7.5 per cent to 15 per cent to check rising imports and reduction of clean energy cess on coal to INR50 per tonne.<br /><br />With a slowdown in the Chinese economy and devaluation of the Chinese Yuan, global metal prices have declined and threat of imports has increased.<br /><br />InfraCircle on 21 November reported domestic aluminium manufacturers have requested the government to exempt the domestic alumina manufacturers from anti-dumping duty on caustic soda.<br /><br />The key requests made by the industry includes increase in customs duty on aluminium products from 7.5 per cent to 15 per cent and reducing clean energy cess on coal from INR400 per tonne to INR50 per tonne, said an executive from a manufacturer requesting not to be named. The executive added that duty drawback rate on aluminium should be increased to 3.7 per cent. <br /><br />The country&rsquo;s aluminium industry includes three leading producers including Vedanta Ltd, Hindalco Industries Ltd and National Aluminium Co. Ltd (Nalco) with a combined capacity of 4.1 million tonne (MT) and invested capital of INR1.2 trillion. According to information made available by the industry, the total consumption of aluminium stands at 3 MT, out of which 50 per cent is imported.<br /><br />{googleAdsense}<br /><br />&ldquo;Clean energy cess on coal has increased over the last few years from INR50 per tonne to INR200 per tonne and was doubled to INR400 per tonne in the last budget. Coal is a significant component of aluminium&rsquo;s cost of production and the increase translates to about INR4,000 per tonne,&rdquo; the executive quoted above said.<br /><br />Other demand being raised by the industry includes increase in customs duty on aluminium scrap to curb imports of scrap. Currently, import duty on automotive scrap is 2.5 per cent and industry wants it to be increased to 10 per cent in case of automotive scrap and 15 per cent in case of non-automotive scrap.<br /><br />The government had earlier turned down the protectionist measures sought by domestic copper industry to counter cheap imports from Japan and the Association of Southeast Asian Nations as the government opined that producers are not facing operational losses.&nbsp;</p>