Indian aluminium producers taking various measures to check imports, working on new products to substitute overseas items

Domestic primary aluminium producers in India, like Hindalco Industries and Anil Agarwal-led Vedanta Limited, are on their toes to bring down the country’s aluminium imports. They are working with the government at three levels – primary aluminium, secondary, and downstream products.

Besides seeking trade remedial measures from the government, such as anti-dumping duty and anti-subsidy duty, the producers are working on new products.

Satish Pai, managing director at Hindalco Industries, said: “We are involved in quite a few import substitution projects and are working closely with the government currently to put more defence alloys and aluminium material.”

He pointed out that 60 per cent of the country’s total lightweight metal industry consumes those cheap aluminium imports.

According to industry officials, the domestic aluminium industry has the potential to substitute 100 per cent primary products and 50 per cent downstream products of the imports with existing capacities. 

Vedanta Limited together with Bharat Aluminium Company Limited has a total integrated aluminium capacity of 2.3 million tonnes, while Hindalco has an aluminium smelting capacity of 1.3 million tonnes.

Sunil Duggal, chief executive officer at Vedanta Ltd, said: “Vedanta Aluminium has put up a facility to make alloy wheels, becoming the first player in India to commercially produce primary foundry alloys for Indian automobile industry.”

India has been one of the largest importers of primary foundry alloys until two years ago.

On the other hand, to arrest the heavy aluminium scrap imports, domestic producers are pledging the government and Bureau of Industry Standard (BIS) to enhance the parameter of quality check in accordance with international aluminium scrap standards of European Union and China.

The Indian aluminium producers also want a non-ferrous metal recycling policy and incentives for recycling domestic aluminium scrap to encourage the use of indigenous scrap in the future. In the financial year 2019-20, aluminium scrap constituted 62 per cent of the total aluminium imports.

“With these developments within the industry, Vedanta Aluminium hopes to increase its domestic market share by about 4-5 percent within one year and by another 5-7 percent within next year,” said Duggal.

Vedanta Aluminium contributes nearly 40 per cent of primary aluminium consumption market share in India, according to FY20 data.

On the pricing front, imported aluminium products enjoy some benefits under various export promotional schemes given by the government of respective countries to their exporters and also under duty-free imports from countries having agreements with India.