The Aluminium Association of India (AAI) has urged the government for an immediate increase in customs duty on imported aluminium scrap. AAI’s demands come as a measure to protect the domestic aluminium industry, seeking a hike from the existing 2.5% to 10%.
The current low customs duty has contributed to a 24% surge in aluminium imports, compared to the last financial year, taking a toll on India’s foreign exchange by approximately US$7 billion (₹56,291 crore).
The AAI, representing the nation’s aluminium producers, has voiced concerns over the quality of foreign aluminium scrap, which remains unchecked.
“Given that foreign scrap is not governed by quality standards, it presents significant safety and environmental risks.”
In addition to the customs duty on scrap, the AAI has called for an increase in the duty on primary aluminium imports to between 10% and 15%, to prevent offloading of substandard products in the Indian market. The association believes that revising the Remission of Duties or Taxes on Export Product (RoDTEP) scheme to include aluminium produced in special economic zones and export-oriented units—which account for over 30% of aluminium exports—could significantly enhance the domestic manufacturing.
Furthermore, to bolster the industry’s competitiveness, AAI recommends slashing the custom duties on crucial raw materials to 2.5%.
The AAI’s move to reshape the duty structure aims to encourage indigenous manufacturing and reduce the risks associated with importing low-grade aluminium scrap, which can have severe safety and environmental repercussions.
This step is in line with the industry’s push towards boosting local production and sustaining economic growth by creating a more balanced trade environment for aluminium in India.