India Govt. may slash import duties on aluminium and other commodities: Sources

The government of India may ponder slashing import duties on products like aluminium, steel, copper, etc. in the budget to dispense some relief to SMEs that have been heavily impacted by the escalation of input costs, as reported by two industry experts aware of this development.

The experts also commented that an announcement on this is anticipated in the upcoming budget. However, no one from the ministry has commented on this as of yet.

The import duty of aluminium levies 10% on aluminium, on steel it is 7.5%, copper 5% and polymers 10%. Furthermore, all the mentioned products also attract 18% integrated goods and services tax to offset local levies on the products.

The sources also revealed that the taxes may now be dropped further in the budget, with a precise section of metals and allied products getting a full exemption.

The Federation of Indian Micro and Small and Medium Enterprises (FISME) in its pre-budget memorandum submitted to the finance ministry, proposed eliminating import duties on aluminium, steel, copper, polymers and suspending additional customs duties on the four commodities to constrain prices.

FISME in its pre-budget memorandum stated: “The prices of building blocks of industrialization: steel, copper, aluminium and polymers on which millions of downstream industries/MSMEs are dependent remain 25-50% higher than their international counterparts.”

Although SMEs calls for a slash in duty, on the other hand, metal producers seek the government to raise duties, especially on aluminium, to avert India from transforming into a dumping ground for overseas producers burdened with high inventory levels.