The Aluminium Association of India has sought an increase in import duty on aluminium scrap. The industry body approached the Centre seeking a hike from 2.5 per cent to 10 per cent. It has also demanded a hike in import duty on primary aluminium from 7.5 per cent to 10 per cent.

Before Budget 2017, import duty on aluminium scrap was at 2.5 per cent and that on primary aluminium was 5 per cent. The Government raised the import duty on primary aluminium to 7.5 per cent in the last budget. As a result, the difference between customs duty on primary aluminium and aluminium scrap got widened from 2.5 per cent to 5 per cent.

The Association claims, this widening of the import duty gap has resulted in increased aluminium scrap imports up to 56 per cent, which is not only dampening the profitability of the aluminium producers in India, but also threatening their very survival.

Aluminium scrap imports by India have surged seven per cent to 9.31 lakh tonnes in FY2016-2017. In the first half of FY 2017-2018, the quantity has already touched 5.41 lakh tonnes and is expected to reach 10.82 lakh tonnes by the end of this fiscal.

India’s overall aluminium import (primary metal and downstream products), which stands at 17.51 lakh tonnes, accounts for 53 per cent of the country’s total domestic demand of 33 lakh tonnes.  This is detrimental to the growth of an industry which has a build-up aluminium production capacity of 41 lakh tonnes.