AAI seeks import duty hike, aims Rs 3 trillion aluminium investment

04 Nov 2024 CW Team

AAI reported that India’s annual per capita aluminium consumption is 3 kg, significantly below the global average of 12 kg. To address the growing domestic demand, expected to reach 10 million tonnes per annum (MTPA) by 2030, AAI estimated an additional investment of Rs 3 trillion over the next six years. The industry has already invested over Rs 1.5 trillion to expand production capacity to 4.2 MTPA.

An AAI representative underscored aluminium’s importance in key sectors such as defence and sustainable infrastructure, advocating for self-sufficiency as essential to India’s development. AAI highlighted that rising primary aluminium imports, which have doubled in recent years, are deterring new investments despite India’s potential to become a global hub. As part of its recommendations, AAI suggested raising import duty on primary and downstream aluminium products from 7.5% to 10% and maintaining a 7.5% duty on aluminium scrap, noting that this measure could reduce cheap imports, promote domestic recycling, and strengthen the circular economy.

Additionally, AAI encouraged the government to adjust duties on essential raw materials, as the industry currently incurs about 17% of its production costs in taxes and regulatory fees. AAI also stated that current investments in the aluminium industry have generated over 8 lakh jobs, both direct and indirect, and supported more than 4,000 small and medium enterprises (SMEs) in rural areas. The proposed Rs 3 trillion investment is projected to create 20 lakh more jobs, aligning with the “Atmanirbhar Bharat” vision. With appropriate duty adjustments and import restrictions, AAI asserted, the aluminium sector could become a major contributor to India’s self-reliance journey.

The Aluminium Association of India (AAI) recently urged the government to raise import duties and proposed a planned investment of Rs 3 trillion to drive growth in the aluminium sector. In its pre-budget recommendations to the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce, AAI emphasized aluminium’s vital role in India’s economic progress, particularly in critical areas like defence, aerospace, renewable energy, and electric vehicles. AAI reported that India’s annual per capita aluminium consumption is 3 kg, significantly below the global average of 12 kg. To address the growing domestic demand, expected to reach 10 million tonnes per annum (MTPA) by 2030, AAI estimated an additional investment of Rs 3 trillion over the next six years. The industry has already invested over Rs 1.5 trillion to expand production capacity to 4.2 MTPA. An AAI representative underscored aluminium’s importance in key sectors such as defence and sustainable infrastructure, advocating for self-sufficiency as essential to India’s development. AAI highlighted that rising primary aluminium imports, which have doubled in recent years, are deterring new investments despite India’s potential to become a global hub. As part of its recommendations, AAI suggested raising import duty on primary and downstream aluminium products from 7.5% to 10% and maintaining a 7.5% duty on aluminium scrap, noting that this measure could reduce cheap imports, promote domestic recycling, and strengthen the circular economy. Additionally, AAI encouraged the government to adjust duties on essential raw materials, as the industry currently incurs about 17% of its production costs in taxes and regulatory fees. AAI also stated that current investments in the aluminium industry have generated over 8 lakh jobs, both direct and indirect, and supported more than 4,000 small and medium enterprises (SMEs) in rural areas. The proposed Rs 3 trillion investment is projected to create 20 lakh more jobs, aligning with the “Atmanirbhar Bharat” vision. With appropriate duty adjustments and import restrictions, AAI asserted, the aluminium sector could become a major contributor to India’s self-reliance journey.

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