India’s Aluminium Industry Calls Upon Government To Cut Duties On Raw Materials

Date: 2020-01-16
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India’s Aluminium Industry Calls Upon Government To Cut Duties On Raw Materials

Last week India’s aluminium industry called upon New Delhi to cut basic customs duties on aluminium fluoride and other raw materials necessary for aluminium production, as such duties make it all but impossible for domestic producers to compete in the global marketplace.

In comments regarding the proposed Union Budget for the next fiscal year, the Aluminium Association of India (AAI) asked the government to cut by 5 percent the basic customs duty on aluminium fluoride, caustic soda lye, and green anode/pre-baked carbon anode, dropping the duty to 2.5 percent.

“To improve the cost structure of the Indian Aluminium industry and enhance competitiveness, it is requested to reduce the basic custom duty on the critical raw materials,” explained the AAI.

“The high import duties on raw materials is a huge disadvantage for domestic aluminium producers which are heavily dependent on imported raw materials. It results in Indian finished goods (getting) costlier and uncompetitive in international markets, rendering negative protection against cheaper imports of finished products, and discourages domestic value addition within the country.”

In addition, the AAI said an increase on import duties for HS Code 7602 aluminium scrap to 10 percent would encourage increased domestic recycling. At present the import duty on aluminium scrap is 2.5 percent. Imported aluminium scrap poses a very real threat to Indian aluminium smelters, as it accounts for 58 percent of all imported aluminium, yielding a forex outgo of ₹17,200 crore in the most recent fiscal year.

The AAI also sought an elimination on the tax on coal in order to boost the power-generation sector and lower power prices for buyers in the aluminium industry. At present India’s tax on coal is ₹400 per metric ton.

India’s finance minister will present the budget for the coming fiscal year on February 1.


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