India’s bauxite imports incur a loss of INR 390 crore in Q1 2021, IIVCC data shows

Indian Industrial Value Chain Collective (IIVCC), a group representing organisations involved in the industrial production and consumption supply chain activities across India, released data on Tuesday, June 22, indicating India’s loss from bauxite import activities. In Q1 2021, the country witnessed a loss of INR 390 crore ($51.97), which otherwise should have belonged to the people of India, particularly to the participants in the value chain of extraction, transportation, processing, and supply of bauxite.

This proves that despite the devastating second wave of COVID-19 hitting the country and industries hard, raw material sufficiency continues to be a burning need for the domestic aluminium industry.

Commenting on the situation, Abhay Raj Mishra, member of Indian Industrial Value Chain Collective (IIVCC) and President of Public Response Against Helplessness and Action for Redressal (PRAHAR), said: "Natural wealth in the form of minerals and natural resources of any region should ideally be utilized for the socio-economic development of its native populace. However, despite India having the fifth largest bauxite deposit in the world, with over 50% of it located in Odisha alone, aluminium industries continue to rely on imported bauxite. This has caused a forex loss of $571 million (INR 4,400 crores) in the last 6 years alone."

He further added, "With bauxite reserves of more than 3.8 billion tonnes, it is baffling that India has to meet its bauxite requirements from imports. For every single mine auctioned, there is potential to garner Rs 5,000 crores for the exchequer and create 10,000 livelihood opportunities. The positive ripple effect that this could have on the socio-economy of the region is significant.”

India possesses the fifth largest bauxite deposit in the world but still continues to rely on the imports of the ore and witnesses large-scale forex loss. For having no substitute, bauxite is the most critical mineral for the growth and development of the Indian aluminium industry. Data published in Import-Export Databank, Ministry of Commerce, shows that bauxite imports to India have increased 300 per cent in the past 6 years.

The state most affected by the forex loss is Odisha, which has nearly 50 per cent of the country’s bauxite reserves and 25 per cent of coal reserves, both of which are the primary raw materials for aluminium production. Odisha has a production capacity of 2.7 million tonnes per annum. It has attracted investments of over INR 1.4 lakh crores to make it the aluminium capital of India.

India’s per capita consumption of aluminium is about 2.7 kg compared to the world average of about 11kg and China’s 24 kg. India’s aim is to increase this 7 to 8 kg for which it needs to increase its bauxite production from the current 20-22 million tonnes to 72 million tonnes per year.

To address the question that why India banks on import despite having vast bauxite reserves is that no Metallurgical Grade Bauxite Mine has been successfully auctioned in the last 6 years since the inception of MMDR Act 2015.