India’s estimated bauxite export to decline more than 50% in 2018; but AAI wants more reduction

An optimistic projection method based on last five years’ export data yielded figures showing India’s bauxite export (HS Code 260600) decreasing by around 53 per cent year-on-year in 2018. From approximately 2.6 million tonnes in 2017 (verified data from Ministry still awaited), the annual bauxite export for the current calendar year is estimated to come down to around 1.2 million tonnes.

However, Aluminium Association of India thinks this quantity should further shrink in order to support more value-addition of the aluminium ore within the country.

The industry body recently approached the Centre urging an import duty hike on aluminium scrap and primary aluminium to 10 per cent from 2.5 per cent and 7.5 per cent respectively. The association also sought an increase in export duty on bauxite from 15 per cent to 20 per cent. According to them, government should encourage more domestic value addition of the ore, and for that it should trim further exports.

Custom duty on bauxite export was marginally reduced from 20 per cent to 15 per cent in Budget 2016 after All India Association of Industries (AIAI) claimed that heavy custom duty was turning Indian bauxite uncompetitive in the global market.

On the contrary Indian aluminium majors including National Aluminium Company (Nalco) and Hindalco Industries have been lobbying the government for complete ban of bauxite exports. They are of the view that retaining more of the ore in the country would help keep aluminium cost of production under control and facilitate further value addition.

India exports bauxite to China, Saudi Arabia, France, Japan, Slovenia, USA, UK, Oman, Italy and Kuwait. China is the main importer of bauxites from India. Imports are quiet negligible in comparison to the exports; the ore is procured in lesser quantities from Guinea and Brazil, the two major suppliers of global bauxite.