Aluminium industry seeks tighter scrap import rules to protect investments
What's the story
India's aluminum industry is embroiled in a debate over the imposition of import duties. The Aluminium Association of India (AAI), representing primary producers, advocates for stricter controls on aluminum scrap imports and quality regulations. They argue that an increase in imports of allegedly substandard scrap could jeopardize investments worth over ₹3 lakh crore. Currently, a Basic Customs Duty of 7.5% is levied on primary aluminum and 2.5% on aluminum scrap.
Joint meeting
Joint meeting held to address concerns
Dhawal Shah, Senior Vice President of the Material Recycling Association of India (MRAI), revealed that both sides of the industry recently attended a joint meeting with the Ministry of Mines. "It was agreed by all that import duty on aluminum scrap should be removed," Shah said. He added that India mainly imports processed aluminum scrap, further complicating the debate over import duties and quality regulations.
Investment threat
AAI warns of investment risks
The AAI has written to the Prime Minister's Office, expressing concerns over the rising imports of substandard scrap. They argue that these imports could pose a threat to investments worth over ₹3 lakh crore. The association also highlighted how their capacity has doubled from 2 million tons per annum (MTPA) to 4.2 MTPA in the last decade, making them one of the largest producers globally after China.
Industry support
ASMA calls for rationalizing custom duties
The Aluminium Secondary Manufacturers Association (ASMA), an industry body with around 3,500 micro, small, and medium enterprise players, also supports the removal of import duties. ASMA has called for rationalizing customs duties to make raw materials more affordable. This move could significantly impact downstream manufacturers as primary aluminum accounts for up to 80% of their production costs.
Global shift
Global trends in aluminum scrap trade
Shah also noted that several major exporting regions such as Europe, the Middle East, and the US are increasingly recognizing aluminum scrap as a strategic resource. They are implementing measures to keep more of it within their own economies to promote low-carbon manufacturing. This global trend could further fuel India's debate over import duties and quality regulations on aluminum scrap imports.