Aluminium industry asks government to increase duty on imported metal to 10%

Himanshu Vatsa | The Dollar Business

Aluminium manufactures have asked the government to increase duty on the imported metal and its scrap up to 10% to protect the domestic industry. At present, the government imposes import duty on aluminium and its scrap at 5% and 2.5% respectively. But the domestic producers have been facing major threat due to cheap import from China and West Asian countries. The issue was discussed on Thursday in a meeting between the representatives of the Aluminium Association of India (AAI), Mines Secretary Balwinder Kumar and Chairman of the Central Board of Excise and Customs Kaushal Srivastava. The industry body has demanded a duty hike up to 10% flat on aluminium and its scrap and expressed hope that the government will listen to the demand soon. Experts say that Chinese exporters are able to reduce the global price of the metal due to the supply of coal-based power to their country’s production plants at cheaper rates. Similarly, aluminium industries in West Asian countries also get competitive edge due to cheap gas-based power supply. “Increase in import duty will definitely boost the domestic aluminium industry. I think the government should listen to the demand,” S K Dash, Executive Director of NALCO (National Aluminium Company Ltd), told The Dollar Business. Industry leaders say that 40% of the production cost is spent on fuel and non-availability of coal within the country hampers the domestic production. In India, imported aluminium costs at least US$ 100 less than the price offered by the domestic suppliers. This has resulted into a steep fall in the market share of Indian aluminium in the past few years. The aluminium industry aims to double the average annual production to 4 million tonnes by 2019. But, the target seems more difficult to achieve with increasing import of the metal. According to an estimate, the aluminium import from China and West Asian countries crossed 1500 kilo tonnes last year. The figure was just 800-900 kilo tonnes in 2011.  

July 17, 2015 | 03:02 pm IST.