AAI urges govt to raise import duties

29 Oct 2024 CW Team

The AAI noted that India’s per capita aluminium consumption remains low at 3 kg per year, compared to the global average of 12 kg. To meet projected domestic demand, which is expected to reach 10 million tonnes per annum (MTPA) by 2030, an additional investment of about $40 billion is estimated over the next six years. The industry has already committed over $20 billion to enhance production capacity to 4.2 MTPA.

An AAI representative stated that aluminium’s role in vital sectors like defence and sustainable infrastructure makes self-sufficiency essential for India’s development. The association highlighted that rising primary aluminium imports, which have doubled in recent years, are hampering fresh investments despite India’s potential to become a global production hub.

The AAI recommended raising the import duty on primary and downstream aluminium products to 10% from the current 7.5%, and setting the duty on aluminium scrap at 7.5%. This adjustment, the association argued, would curb inexpensive imports, promote domestic recycling, and strengthen the circular economy.

To enhance competitiveness, the AAI also called for rationalising duties on essential raw materials, citing that the industry currently faces taxes and regulatory charges accounting for around 17% of production costs.

The AAI reported that existing investments in the sector have generated over 800,000 direct and indirect jobs and supported more than 4,000 SMEs in remote areas. The proposed Rs3 trillion investment is expected to create an additional 2 million jobs, aligning with the government’s “Atmanirbhar Bharat” vision. The association asserted that with appropriate duty adjustments and import controls, the aluminium sector could significantly advance India’s self-reliance goals.

The Aluminium Association of India (AAI) has urged for increased import duties and a strategic investment of Rs3 trillion to drive growth in the aluminium sector, as outlined in its pre-budget recommendations submitted to the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce. The AAI emphasised aluminium’s critical role in India’s economic development, given its extensive applications across sectors such as defence, aerospace, renewable energy, and electric vehicles. The AAI noted that India’s per capita aluminium consumption remains low at 3 kg per year, compared to the global average of 12 kg. To meet projected domestic demand, which is expected to reach 10 million tonnes per annum (MTPA) by 2030, an additional investment of about $40 billion is estimated over the next six years. The industry has already committed over $20 billion to enhance production capacity to 4.2 MTPA. An AAI representative stated that aluminium’s role in vital sectors like defence and sustainable infrastructure makes self-sufficiency essential for India’s development. The association highlighted that rising primary aluminium imports, which have doubled in recent years, are hampering fresh investments despite India’s potential to become a global production hub. The AAI recommended raising the import duty on primary and downstream aluminium products to 10% from the current 7.5%, and setting the duty on aluminium scrap at 7.5%. This adjustment, the association argued, would curb inexpensive imports, promote domestic recycling, and strengthen the circular economy. To enhance competitiveness, the AAI also called for rationalising duties on essential raw materials, citing that the industry currently faces taxes and regulatory charges accounting for around 17% of production costs. The AAI reported that existing investments in the sector have generated over 800,000 direct and indirect jobs and supported more than 4,000 SMEs in remote areas. The proposed Rs3 trillion investment is expected to create an additional 2 million jobs, aligning with the government’s “Atmanirbhar Bharat” vision. The association asserted that with appropriate duty adjustments and import controls, the aluminium sector could significantly advance India’s self-reliance goals.

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