Representative image showing production line of aluminium rolls.
Credit: Reuters File Photo
Bengaluru: The Aluminium Association of India (AAI) has urged the central government to increase the import duty on primary and downstream (foils, rods, sheets) products to 10 per cent from the existing 7.5 per cent, in order to protect the domestic industry.
In its pre-budget representation to the Department for Promotion of Industry and Internal Trade (DPIIT) of the Commerce Ministry on Monday, the AAI has sought protection against the influx of imports as it is deterring new investments in the sector, saying that India has all the necessary ingredients to emerge as a global aluminium hub.
It also sought the duty on aluminium scrap at 7.5 per cent, at par with other aluminium products.
According to industry estimates, India’s per capita consumption of aluminium is around 3 kg per annum, compared to the global average of 12 kg. However, the domestic demand for aluminium is expected to reach 10 million tonnes per annum (MTPA) by 2030, despite which, the sector is facing major challenges in attracting fresh investments, owing to a surge in imports.
So far, the Indian aluminium industry has invested over Rs 1.5 lakh crore, to expand production capacity to 4.2 MTPA to meet the growing demand. However, a further investment of 3 lakh crores over the next 6 years will be needed to meet the expected demand of 10 MTPA, the AAI said in its pre-budget representation.
The apex body has put forth a request to review the existing duty structure on essential raw materials. “Presently, the industry incurs around 17 per cent of its cost of production in taxes, levies, and regulatory compliance charges which it believes should be rationalised,” a press release by AAI said.
Over the past couple of years, imports of primary aluminium have doubled while there has also been a significant surge in low-quality scrap and downstream products, especially from China.