The Aluminium Association of India (AAI), the apex body representing the top aluminium producers within India, has submitted its pre-budget representation to the Department for Promotion of Industry and Internal Trade under the Ministry of Commerce.

As per industry estimates, India’s per capita consumption of aluminium is still around 3 kg per annum, compared to the global average of 12 kg.

However, the sector is facing major challenges in attracting fresh investments, despite domestic demand for aluminium set to reach 10 MTPA by 2030.

So far, the Indian aluminium industry has invested over INR 1.5 lakh crore, or $20 Bn, to expand production capacity to 4.2 MTPA to meet the growing demand. 

However, a further investment of 3 lakh crores ($40 billion) over the next 6 years will be needed to meet the expected demand of 10 MTPA, while also creating more jobs within India.

According to industry members the primary reason for the surge in imports is the low import duties on primary/downstream products and a prevalent duty difference between primary goods & scrap in aluminium. 

This is unlike other key non-ferrous metals, where the duty for scrap and primary is at par. The AAI has therefore requested the Central Government to increase the import duty on primary/downstream products to 10% from the existing 7.5%. 

Additionally, to control cheap imports, the duty on aluminium scrap also needs to be set at 7.5%, at par with other aluminium products. AAI further informed that the industry incurs around 17% of its cost of production in taxes, levies, and regulatory charges.