Aluminium Association Seeks 15% Import Duty Hike and Stricter Scrap Quality Rules

The Aluminium Association of India (AAI) has formally asked the Ministry of Finance and the Department for Promotion of Industry and Internal Trade (DPIIT) to raise the import duty on aluminium products to 15%. Additionally, AAI is pushing for the implementation of rigorous quality control measures on imported aluminium scrap.

AAI's primary objective is to safeguard the domestic market and prevent India from becoming a destination for surplus global aluminium, a situation exacerbated by escalating tariffs and non-tariff barriers imposed by major economies like the United States, China, and Europe. With these countries restricting imports, there's a risk of aluminium being diverted to India, which currently has a lower import duty of 7.5% on the metal.

The association highlighted that while India's aluminium consumption has surged by 160% over the past 14 years, the growth in imports has been considerably higher, outpacing consumption growth by 90 percentage points during the same period. Projections indicate a further significant increase, with aluminium imports forecasted to rise by 72% to ₹78,036 crore in fiscal year 2026, up from ₹45,289 crore in fiscal year 2022. If this trend continues, AAI warns that domestic players' investment plans could be jeopardized, as an estimated 55% of India's total aluminium demand in FY26 might be met through imports.

Impact: This news could positively impact domestic aluminium producers by making imports less competitive, potentially leading to higher prices for domestically produced aluminium. However, downstream industries that rely on imported aluminium or aluminium products might face increased costs. The government's decision will be crucial for the sector's future. Rating: 7/10

Difficult Terms: Import Duty: A tax levied by a country's government on goods imported from foreign countries. This makes imported goods more expensive, encouraging consumers to buy domestically produced items. Scrap Imports: The import of used or discarded materials, such as old aluminium cans, vehicle parts, or industrial waste, which are intended for recycling and reprocessing into new products. Dumping Ground: A situation where foreign countries or companies sell goods in another country at unfairly low prices, often below their production cost, to gain market share or get rid of excess inventory. Geopolitical Tariff and Non-Tariff Barriers: These are trade restrictions imposed by countries often due to political relationships or strategic reasons. Tariffs are taxes on imports, while non-tariff barriers include regulations, quotas, standards, or licensing requirements that make it harder or more expensive to import goods.