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India Reviews Import Duties
India's Directorate General of Trade Remedies (DGTR) has begun investigating aluminium wire products imported from Malaysia. This move comes as the current countervailing duties (CVDs) on these imports are scheduled to lapse in September 2026. The investigation was initiated by Indian manufacturers who want the trade protections extended.
Duties Set to Expire
India's existing CVDs on Malaysian aluminium wire and wire rods, first imposed in September 2021 for five years, are now nearing expiry. The DGTR's investigation follows a similar probe initiated in June 2020. This signals India's continued effort to shield its domestic primary aluminium production, which has an 8.25% basic customs duty, placing it among countries with higher tariffs globally. Major Indian producers, including Hindalco Industries (Market Cap ₹2,38,645 Cr, P/E ~14.8) and Vedanta Limited (Market Cap ₹2,90,346 Cr, P/E ~13.62), are seeking to extend the duties to maintain market stability and favourable pricing.
Market Landscape and Key Players
The Indian aluminium wire market is a significant and growing sector, expected to reach $4.12 billion by 2032, with Electrical Conductor (EC) wire rods being the main demand driver. Malaysia is a key global exporter of aluminium wire, with a 29% share, sending about $9.17 million worth of wire to India in 2024. India is also a major exporter ($501 million in 2024), but the domestic industry frequently uses trade barriers to manage import pressures. India has a history of using protectionist measures in its metals sector. The Aluminium Association of India (AAI) has repeatedly called for higher duties, proposing a 15% basic customs duty on all aluminium products to counter cheaper imports. Previous trade disputes, like US tariffs on aluminium, have affected Indian metal stocks, including Hindalco, highlighting the sector's sensitivity to global trade policies. This investigation is part of a wider strategy by major Indian players to use trade policy for market advantage. Hindalco's share price rose about 30% in the six months before March 2026, and Vedanta's shares climbed roughly 66% in the same period. This reflects investor confidence, supported by industry tailwinds and strategic moves. As of late April 2026, Hindalco was trading around ₹1061.8 and Vedanta around ₹742.5.
Risks for Downstream Industries
While extended import duties could secure market share for major producers like Hindalco and Vedanta, they pose significant risks for downstream industries. Sectors like electrical cable manufacturing, which depend heavily on aluminium wire as a key input, face higher costs. India's large downstream aluminium sector, with about 3,500 MSMEs, could see squeezed profit margins and reduced competitiveness against finished imports that don't face duties. Additionally, past allegations of significant underreporting of aluminium production by Hindalco and its subsidiary BALCO (between 1997 and 2017) raise questions about regulatory compliance and transparency, potentially affecting the reliability of data used to support trade protection requests. Relying on these duties may provide short-term relief but could also hinder innovation and long-term global competitiveness.
Industry Outlook and Analyst Views
Analysts have mixed views on the sector's direction. Kotak downgraded Hindalco to 'Reduce' in August 2025, citing tariff effects on its Novelis subsidiary. MarketsMOJO recently moved Hindalco's rating to 'Hold' from 'Buy' due to valuation and sector cycle concerns. Despite these cautions, the Indian aluminium wire market is projected for strong growth, with an expected compound annual growth rate of 7.5% from 2025 to 2030, potentially reaching $5,649.5 million. The DGTR investigation's outcome will be a key factor in determining future pricing and competitive positions for domestic producers and international suppliers in India's crucial aluminium wire market.