The Aluminium Association of India has urged the Union government to extend duty remission benefits under the Remission of Duties or Taxes on Export Product (RoDTEP) scheme for aluminium produced from advance authorisation (AA), export-oriented units (EOUs), and special economic zones (SEZs).
Experts estimate that this move could benefit the industry by USD 60 million.
The RoDTEP scheme, introduced in January 2021 to boost exports, was initially in effect until March 2024 and later extended until February 2025.
India, the world’s second-largest aluminium producer with an annual output of 4.5 million tonnes, exports around 40 per cent of its aluminium, primarily to West Asia and Europe. This segment contributes nearly $5 billion to India’s export economy.
Industry experts highlight that international realisation rates for aluminium are typically lower than domestic rates, making the RoDTEP scheme vital in offsetting price disparities.
A senior industry official stated that 1.25 million tonnes of last year’s aluminium exports were from AA, EOU, and SEZ units. Aluminium producers face total taxes of 8-9 per cent on exports, with RoDTEP offering a relief of around 2.2 per cent.
The association stressed that central and state taxes, along with duties, account for 5-10 per cent of production costs in SEZs, impacting the industry’s global competitiveness.
If RoDTEP benefits are not extended, domestic producers may be forced to cut production, further affecting the sector.
Adding to the challenges, the US recently raised tariffs on aluminium imports from 10 per cent to 25 per cent. While India remains a key global player, exports to the US constitute about 10 per cent of its total aluminium exports.
Retaining global competitiveness is crucial for sustaining India’s aluminium industry growth.