Union Budget 2018: Indian aluminium sector’s wish list from Finance

As Finance Minister Arun Jaitley starts to present Union Budget 2018 today at Parliament, Indian aluminium sector waits eagerly to see if its wishes and demands are fulfilled.  

The aluminium industry wants duty on essential raw materials of aluminium production like alumina and coal tar pitch to be reduced and policies to be implemented that would equate import duty on aluminium scrap with that on the primary metal.

Here’s a list of wishes of the Indian Metals & Mining industry from Union Finance Ministry:

1) Decrease in basic customs duty on coking coal across grades

2) Decrease in export duty on iron ore above certain grade levels

3) Hike basic customs duty on aluminium scrap to protect domestic industry

4) Accelerate minerals exploration

The aluminium industry (represented by Aluminium Association of India) wants basic custom duty reduction for critical input materials:

• Alumina from 5 per cent to zero
• Coal Tar Pitch from 5 per cent to 2.5 per cent
• Caustic Soda Lye from 2 7.5 per cent to 2.5 per cent
• Aluminium Fluoride from 7.5 per cent to 2.5 per cent
• Anodes from 7.5 per cent to 2.5 per cent

It is also hoping for:

• An increase in export duty on bauxite ore from 15 per cent to 20 per cent
• An increase in import duty by 2.5 per cent for aluminium products
• GST compensation cess on coal INR 400 per tonne) to be eliminated

On the other hand, Metal Recycling Association of India (MRAI) is strongly opposing any increase in custom duty on aluminium scrap as doing that would make business unviable for domestic downstream aluminium manufacturers.

This year’s Budget is crucial for many reasons, since it comes after two of the biggest policy implementations and moves of recent times- Demonitisation and Goods and Services Tax (GST). On January 29, FM presented The Economic Survey, where he projected a GDP growth of 7 to 7.5 per cent for the economy in FY 2018-19.