India's engineering consultant recommends imposition of 15% MIP on aluminium

<p>Mecon, India's leading engineering consultant, has recommended imposition of minimum import price (MIP) on primary aluminium products. The firm submitted its report stating its findings and recommendations to the Aluminium Association of India last week. <br /><br />Mecon was appointed by the aluminium industry body comprising domestic aluminium producers Hindalco Industries Ltd., Bharat Aluminium Co. Ltd, Vedanta Ltd, to investigate the case of cheap aluminium imports from China and other countries flooding India market and come up with a report on why there was a need to impose a safeguard duty on the products' import.<br /><br />&ldquo;The association has forwarded recommendation on imposing MIP at 15 per cent of London Metal Exchange (LME) price on primary aluminium imports to the ministry of mines. The mines ministry has asked the association to send recommendations on secondary aluminium products as well so that they can be examined and forwarded to the finance ministry in one go,&rdquo; a senior government official said.<br /><br /><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/India%20aluminium%20MIP.jpg" alt="News" width="468" height="350" /><br />As per Mecon's report, China which happens to be the world&rsquo;s largest producer and consumer of aluminium has been dumping substantial volumes of subsidized aluminium products in the country. Given the fact that the demand for the metal here is still very low and the market for domestic producers is limited and very much within their capacity reach, the oversupply of cheap foreign metal products is cutting deep into their market shares. The primary aluminium producers claim they have incurred losses amounting to INR4,025 crore in 2015-16 compared to INR 1,480 crore loss in the previous fiscal.<br /><br />So, they have been seeking a minimum 15 per cent safeguard duty on all primary aluminium products imports including those from West Asia and China.<br /><br />{googleAdsense}<br /><br />Government of India had increased duty on aluminium imports by 2 per cent to 7.5 per cent in the last Union Budget. But domestic producers claim that the hike was far offset by simultaneous doubling of green cess on coal, the primary energy ingredient of aluminium smelting in India. Increase in cost of coal led to escalation of power cost that constitutes 40 per cent of CoP of aluminium.</p>