Aluminium Association Urges Budget 2026-27: 15% Customs Duty Hike and Strict Quality Standards for Scrap Demanded

In pre-Budget consultations for the Union Budget 2026-27, the Aluminium Association of India (AAI) has strongly advocated for increased protection for the domestic aluminium industry. AAI's primary demands include raising the Basic Customs Duty (BCD) on all aluminium products to a uniform 15% and introducing strict quality control standards for aluminium scrap imports, benchmarked against global standards in countries like the European Union, China, and Malaysia. The association argues that these steps are crucial to prevent the dumping of surplus and low-quality aluminium from overseas, which threatens domestic investments and production capabilities.

AAI highlighted India's significant growth in aluminium consumption, projected to rise from 5.5 million tonnes (MT) in FY2025 to 11.5 MT by FY2035. They also noted that aluminium is recognized globally as a critical metal for sectors like defence, aerospace, and infrastructure, underscoring the need for India to bolster its domestic production to avoid supply chain risks. The Indian aluminium industry has already made substantial investments of ₹1.5 lakh crore, doubling its capacity to 4.2 MTPA and creating numerous jobs and small enterprises. The industry body warned that without adequate tariff protection and quality regulations, India could become a dumping ground, impacting the transition to greener production methods. Aligning scrap import standards with international norms is seen as vital for the growth of India's secondary aluminium sector.

Impact This news could significantly influence the profitability and investment landscape for Indian aluminium producers. A customs duty hike and stricter scrap norms would likely favour domestic primary and secondary producers by reducing competition from imports. End-users might face slightly higher costs, but the overall aim is to strengthen the domestic value chain and ensure a stable supply of this strategic metal. Rating: 7/10.

Difficult Terms - **Basic Customs Duty (BCD)**: A tax levied by the government on goods imported into the country. - **Aluminium Scrap**: Discarded aluminium materials or waste that can be reprocessed and recycled. - **Dumping**: The practice of exporting goods at a price lower than their normal value, often below cost, to gain an unfair market advantage. - **Primary Aluminium**: Aluminium produced directly from bauxite ore through electrolytic reduction. - **Secondary Aluminium**: Aluminium produced from the recycling of aluminium scrap. - **MTPA**: Million Tonnes Per Annum, a unit measuring production or consumption capacity. - **NITI Aayog**: National Institution for Transforming India, a government policy think tank. - **BIS**: Bureau of Indian Standards, India's national standards body responsible for quality certification.