INR 3 lakh crore investment pipeline in danger: AAI urges the government to protect India from rising import threats

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The Aluminium Association of India (AAI) has urgently appealed to the Prime Minister’s Office to protect the domestic aluminium industry from a surge of low-quality aluminium scrap. The industry body warns that rising global protectionism has left India highly vulnerable, threatening massive domestic investments and draining the nation's exchequer. AAI noted that the domestic aluminium industry is presently confronting a severe "double-whammy" scenario due to increasing imports and diminishing access to export markets and has sought urgent measures, including imposing enhanced Basic Customs Duty (BCD), to curb the import surge.

• The United States has hiked Section 232 national security duties to 50 per cent. The EU is introducing the Carbon Border Adjustment Mechanism (CBAM) alongside safeguard investigations. Mexico has aggressively hiked customs duties on Chapter 76 up to 35 per cent despite lacking primary smelting capacity.
• Developed economies like the USA and EU are restructuring regulations to retain high-quality scrap while exporting low-grade material (< 90 per cent aluminium content). Meanwhile, peers like Malaysia and China have restricted the import of poor-quality aluminium scrap and only permit import of high-quality aluminium scrap.

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Due to the rising protectionism by developed economies, India is not just facing major import threat from global aluminium surplus capacities but is also facing imports of low-quality scrap due to absence of quality standards. In a detailed representation to the PMO, AAI has sought:

• Strengthening domestic market by imposing necessary trade measures, including enhanced Basic Customs Duty (BCD) to address the surge in aluminium imports, which reached an all-time high of 3.48 MPTA in FY26, resulting in a forex outgo of over INR 88,400 crore.
• Publish the final draft standard titled “Aluminium & Aluminium Alloy Scrap – Requirements & Conditions of Delivery”, which has already been approved by NITI Aayog, BIS, JNARDDC and the BIS Working Group, to align India's quality standards with global best practices and prevent the import of low-quality aluminium scrap. Absence of such quality control orders would create a pathway for low-quality aluminium scrap to enter sensitive end-use sectors such as utensils, electrical applications, and consumer durables, where material integrity and safety are critical. In the absence of robust quality controls, this poses risks to product performance, consumer safety, and overall industry standards in the country.
• Consider any changes to aluminium scrap import duty only after publication of the pending standard and introduction of grade-wise HSN codes, ensuring that only high-quality aluminium scrap is imported into India.
• Promote India's circular economy by establishing a robust domestic aluminium scrap collection and recycling ecosystem, reducing dependence on imported aluminium scrap, which resulted in a forex outgo of over INR 40,200 crore in FY26.

The request follows an unprecedented surge in imports under Chapter 76, which reached an all-time high of 3,479 KTPA in FY26. This influx has resulted in a staggering INR 88,434 crore forex loss to the country's exchequer, with unchecked aluminium scrap imports alone swallowing INR 40,203 crore.

AAI highlighted that the Indian aluminium industry is a vital pillar of the economy, contributing nearly INR 30,000 crore annually to the exchequer, supporting over 8 lakh jobs and around 4,000 MSMEs across India's hinterlands. It also cautioned that rising imports threaten over INR 3 lakh crore of planned investments by leading producers, which are expected to create more than 1 lakh jobs and double India's primary aluminium production capacity to 9 MTPA by FY33 to meet growing domestic demand.

AAI stated that it is the need of the hour for India to establish similar quality standards and highlighted that the final draft standard, already approved by the BIS Working Group, NITI Aayog, and the Ministry of Mines' own units, has remained pending with the Ministry of Mines for more than two years. AAI stated that immediately notifying these standards and tackling dumping is crucial to achieve an Atmanirbhar Bharat and fulfil the Prime Minister’s vision of global recognition for India’s premium-quality aluminium.

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