India’s industry body FICCI has called for an increase in the import duty on aluminium and aluminium products to at least 12.5% in the upcoming Union Budget 2023–24. The move is aimed at curbing the dumping of aluminium products and encouraging the growth of the domestic manufacturing and recycling industry. The current import duty on aluminium and aluminium products is 10%. FICCI has stated that there has been a surge in subpar aluminium imports, particularly from China, which currently constitutes over 85% of downstream aluminium imports. India is also seeing imports from the US, the UK, Malaysia, and the Middle East, with these countries supporting their domestic industries with concessions and benefits.
Why it matters:
The aluminium industry in India has been struggling with a slump in global demand, rising production and logistics costs, a deluge of imports, and a declining market share. At present, over 60% of India’s demand for aluminium is being met through imports. An increase in import duty would help curb the influx of subpar aluminium imports, and encourage the growth of the domestic manufacturing and recycling industry. FICCI has also recommended rationalizing the inverted duty structure on several key materials from 7.5% to 2.5% to encourage domestic manufacturing and combat the dumping of imports. Additionally, it has recommended eliminating the cess on coal in a bid to support highly power-intensive industries like aluminium. The Union Budget will be presented by the country’s Minister of Finance and Corporate Affairs Nirmala Sitharaman on 1 February.