The Business Bytes
New Delhi, October 28, 2024 (TBB Bureau): As India gears up for the Budget 2025, the Aluminium Association of India (AAI), representing top aluminium producers nationwide, has formally submitted its pre-budget recommendations to the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce. The AAI underscored the metal’s pivotal role in India’s growth ambitions, aligning with the national vision of a developed ‘Viksit Bharat’ by 2047. Aluminium’s extensive application across sectors marks it as an indicator of advanced economies, leading countries such as the USA, Malaysia, and Indonesia to declare it a ‘strategic sector.’
Despite the rising domestic demand, India’s per capita aluminium consumption remains around 3 kg annually, far below the global average of 12 kg. To address this gap, the Indian aluminium industry has invested over INR 1.5 lakh crore ($20 billion) to expand production capacity to 4.2 million tonnes per annum (MTPA). With consumption projected to reach 10 MTPA by 2030, the industry estimates an additional investment of Rs. 3 lakh crore ($40 billion) is required over the next six years to meet demand and create new jobs within India.
To support these investment goals, the AAI is urging the government to fortify the industry against a growing influx of low-cost imports, which is undermining domestic market growth and deterring fresh investments. Import levels of primary aluminium have surged twofold, with low-quality scrap, especially from China, flooding the market. According to industry leaders, this influx stems from low import duties on primary and downstream aluminium products, as well as a duty disparity between primary goods and scrap — a situation not seen in other non-ferrous metals, where duties are on par.
The AAI recommends increasing the import duty on primary and downstream products from 7.5% to 10%, as well as raising the duty on aluminium scrap to 7.5% to align with other aluminium imports. This policy shift would encourage domestic recycling, limit low-quality scrap imports, and support a more robust circular economy.
To maintain global competitiveness, the AAI also calls for rationalizing tax and regulatory levies, which currently account for 17% of production costs. Easing these costs would not only relieve the industry but also create a favorable environment for growth, positioning India as a leading aluminium hub globally.
The AAI emphasized that industry investments have already created over 800,000 jobs and supported more than 4,000 small and medium enterprises (SMEs), particularly in remote areas. Additional investments to meet the 10 MTPA demand could generate 2 million more livelihood opportunities, reinforcing the Prime Minister’s vision of “Atmanirbhar Bharat.” With supportive measures such as duty rationalization and tighter import controls, domestic aluminium producers are confident they can fuel India’s path to self-reliance and global leadership in aluminium production.
