Downstream aluminium manufacturers have urged the Centre to reduce customs duty on primary aluminium and aluminium scrap, arguing that the current tax structure has placed micro, small and medium-sized enterprises (MSMEs) under severe cost pressure and eroded their competitiveness. The associations said high input costs and squeezed margins have constrained expansion and employment within the value chain, prompting a joint appeal to the mines ministry for policy relief.

The Aluminium Secondary Manufacturers Association (ASMA), the Cables and Conductors Manufacturers Association of India (CACMAI) and the Federation of All India Aluminium Utensils Manufacturers (FAIAUM) submitted a joint representation noting that the effective import duty of 8.25 per cent on primary aluminium and 2.75 per cent on scrap has enabled domestic producers to price metal at import parity, disadvantaging downstream units. They argued that any reduction in duty could ease input costs, support capacity utilisation and underpin exports, although such measures may face resistance from primary producers.

The industry bodies highlighted that India’s per capita aluminium consumption at two point five kilogram (kg) remains well below the global average of 11 kg, and expressed concern about a sharp rise in input costs. They reported that margins of downstream MSMEs have compressed by as much as 70 per cent over recent years, while input costs have risen by between 20 and 35 per cent in the last three months. The associations said the duty structure has created an inverted playing field.

Finished aluminium products enter under preferential free trade agreement concessions at near zero duty while primary metal attracts higher import levies, the representation noted, and this is harming sectors such as cables, conductors, transmission, energy storage, extrusions, foundries and recycling. The bodies warned that the European Union’s Carbon Border Adjustment Mechanism could further affect exporter competitiveness and requested that the mines ministry consider a reduction in basic customs duty, offering to present their case in person.