Can the world’s second-largest producer of aluminium feel the heat? That, indeed, seems to be the case with India’s aluminium producers who are clamouring for protection.
The country’s top aluminium producers called on the central government on Monday morning to safeguard the industry from surging imports.
“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,” a statement released by the Aluminium Association of India (AAI) said.
Since aluminium is an established marker of advanced economies for its extensive usage in sectors ranging from aerospace, defence, electric cars, and renewable energy, it is imperative that India’s consumption of the metal goes up, said the association. It also called for increased domestic investment in the sector in a bid to ramp up local production to achieve the lofty goals of a ‘Viksit Bharat’.
But right now, the influx of imports in the domestic market is a deterrent to making new investments in the sector, even when India has all the necessary ingredients to emerge as a global aluminium hub. According to them, the primary reason for the surge in imports is the low import duties on primary and downstream products and a prevalent duty difference between primary goods and scrap in aluminium, unlike other key non-ferrous metals, where the duty for scrap and primary is at par.
As per figures by the United Nations, India imported about Rs 57,000 crore worth of aluminium in various forms last year. India’s imports have picked up in recent years, even as investment in domestic capacity dwindled.
AAI has argued that the only way forward is for the government to safeguard domestic industry by increasing duty on all types of aluminium from the present 7.5 per cent to 10 per cent in the upcoming budget in February.
India’s aluminium requirement is expected to increase to 10 metric tonnes by the end of this decade, though production capacity within the country is only at 4.2 metric tonnes.