Union budget spotlight: AAI demands tougher aluminium products import norms

The Aluminium Association of India (AAI), ahead of the Union Budget for 2026–27, has urged the government to expand the basic customs duty on all aluminium products, including scrap, to 15 per cent. This has been demanded to limit the influx of low-quality imports and protect domestic manufacturers.

The association believes that by initiating this move, it would be possible to align the quality standards for aluminium scrap in India with global leaders like the EU and China, while also preventing the country from becoming a dumping ground for metal waste.

Additionally, the AAI pointed out that the domestic aluminium industry, due to unchecked imports, is still under pressure, even though there's enough local capacity to satisfy current demand.

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It also mentioned that with the increase in imports, India’s aluminium trade deficit is expected to hit a record high of INR 30 thousand crore (USD 3.4 billion) in FY26. Currently, the basic customs duty is set at 7.5 per cent for primary aluminium products, 2.5 per cent for aluminium scrap and between 7.5 per cent and 10 per cent for downstream aluminium items.

With the vision of keeping India from becoming a dumping ground for waste, the association has urged the Indian government to set up strict quality standards for aluminium scrap, similar to those already in place in the EU, Malaysia and China. Undertaking these steps would not only boost the domestic scrap market but also encourage a circular economy.

In 2025, the London Metal Exchange (LME) aluminium prices rose by over 20 per cent and it is forecasted to remain high. This is mainly because China, which is the biggest aluminium producer globally, has set a cap of 45 million tonnes of production.

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In addition to this, raw material like bauxite supplies is also facing a shortage, especially in Guinea and Brazil, making the global aluminium industry face a tighter supply situation.

In the last year, shares of domestic aluminium producers like Hindalco and National Aluminium have jumped over 50 per cent due to a robust rally in industrial metals such as aluminium, copper and silver.

Concurrently, global aluminium industry organisations, including the International Aluminium Institute, have announced that the aluminium market has entered a structural deficit for the first time in twenty years.

To know more about the global primary aluminium industry 2026 outlook, book the report “Global ALuminium Industry Outlook 2026".