India's Mines Ministry agrees on doubling of aluminium import tax

The Mines Ministry of India, after being approached by AAI and leading aluminium makers of the country last week, has agreed on the issue of increasing import tax on aluminium. The Ministry will ask its counterparts in the government’s finance department to double the import tax to counter cheap imports from China and the Middle East.

Producers have sought a 10 percent increase in custom duty, confirmed Mines Secretary Balvinder Kumar. “The industry is in a difficult situation and they need some sort of government support to tide over the situation,” he said.

Cheap imports from China and the Middle East along with plunging LME prices because of global glut have made aluminium smelters across the country economically unviable. The metal slumped 18.6 percent to a six-year low on LME in the past year.

“In case of a further fall in prices we will be forced to take recourse to down-scaling of operations as our position would become economically untenable,” said Abhijit Pati, CEO of Vedanta’s aluminum business.

Exports of unwrought aluminum and semi-fabricated products from China grew 35 percent to 2.5 million metric tons in the first half from the same period last year. While the world’s largest producer requires a 15 percent export duty on primary aluminum, it offers a 13 percent tax rebate on shipments of semi-fabricated products.