BIZ-ALUMINIUM

Aluminium producers' seek import duty hike ahead of budget
    Bhubaneswar, Jun 16 (PTI) Ahead of the budget,
aluminium producers have sought steps from the government to
hike import duty on primary aluminum, scrap and downstream
products and rationalise costs of raw materials.
    Industry bodies such as the Aluminium Association of
India (AAI) and FICCI have informed the government that the
aluminium sector of the country is going through a challenging
phase and is under immense threat by rising imports, declining
domestic market share, rising production and logistics costs.
    Moreover, non-competitive energy costs and acute coal
shortage for the industry have adversely hit the
sustainability of the aluminium industry, Rahul Sharma, co-
chairman of FICCI Committee on Mining and Minerals, said in a
press statement.
    Noting that aluminiums importance is next to that of
steel, but policy measures are being developed and introduced
to protect the domestic steel industry in the last three
years, he said.
    Some of the special provisions extended to the steel
industry are anti-dumping duties for Chinese imports,
safeguard duties of 10-20 per cent levied on steel imports,
and a minimum 10 per cent increase in the basic customs duty
on all steel products.
    The aluminium industry continues to suffer due to the
lack of such measures, said Sharma, also an active member of
the AAI.
    The AAI has recently written to the Ministry of Mines
to provide some relief in the form of increasing basic customs
duty on aluminium products from 10 per cent to 12.5 per cent
and reducing basic customs duty and correction of inverted
duty structure on raw materials.
    The FICCI has also conveyed similar recommendations to
the government.
    Stating that India's demand for aluminium is expected
to double to over 7 million tonnes in the next five years,
Sharma said, the industry has invested over Rs 1.2 lakh crore
to enhance its capacity to 4 MTPA to cater to the increasing
demand.
    The sector is also one of the largest job creators
with more than 8 lakh direct and indirect employment.
    In the last few years, the steel industry has received
policy support from the government that has enabled the sector
to immune itself from global market volatility and reduce
dependence on import and excess supplies.
The government support has resulted in a drop of steel
imports by 21 per cent in last three years, he said.
    In contrast, a lack of similar policy support pushed
the aluminium industry to post highest ever aluminium import
of 23 lakh tonnes in FY19, 58 per cent of India's demand,
resulting in a forex outgo of Rs 38,000 crore, Sharma said.
    In the current circumstances, Indian aluminium
industry requires the government to extend policy measures in
line with what has been extended to the steel industry, he
said.
    Restrictive measures by China, USA and others to
protect their indigenous markets from imports are making India
more vulnerable as a dumping ground for primary metal, scrap
and secondary products, adversely affecting the
competitiveness of the domestic industry, he said.
    "Hence, immediate measures like increased import duty
on primary aluminum, scrap and downstream aluminium products
are required along with rationalisation of input costs of
critical raw material of aluminium value chain to help
domestic industry retain competitiveness, Sharma said.
    AAI in its communication to the Centre said the role
of aluminium in energy security, infrastructure, defense,
aerospace, automobile, electricity, packaging and consumer
products makes it a sector of strategic importance.
    However, the cost of production of aluminium metal in
India has substantially increased over past 3-4 years due to
rising cost of raw materials, increase in various duties, cess
and high logistic costs.
    Among the largest aluminium producers like China,
Canada, Russia, Middle East and Norway, India has the highest
cost of production, which can be attributed to high power cost
due to increasing coal prices, high cess on coal, electricity
duty and logistics. PTI SKN
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(This story has not been edited by THE WEEK and is auto-generated from a PTI feed.)