Earlier this week The Aluminium Association of India (AAI) delivered a letter to its government lamenting the elevated import levels of aluminium from abroad and their wariness of the People’s Republic of China’s inclusion in the Regional Comprehensive Economic Partnership (RCEP).
“The sustainability of Indian aluminium industry has been adversely impacted by the increasing imports and declining domestic market share,” said the AAI in the epistle delivered to the Commerce Ministry on Wednesday.
AAI continued by saying that 60 percent of the country’s aluminium demand is met from metal shipped in from abroad, despite the country’s aluminium production capacity of 4.1 million metric tons per annum, which it says is adequate for quenching the demand.
The Association noted that the lion’s share of imports entered under free-trade agreements, most of which originate from China. Per AAI, Chinese importers are unduly taking advantage of such agreeements.
In fact, according to the AAI, “the presence of China in RCEP is the biggest threat for the Indian aluminium industry,” as China is one of the member nations, along with ASEAN and others, with which the Indian government is negotiating the terms of RCEP.
“The presence of China is a severe threat which will worsen India’s trade deficit, adversely affecting the Indian aluminium industry. China is the largest producer and exporter of aluminium products, with aluminium production capacity of 47 million MT (metric tonne) and surplus aluminium capacity of around 10 million MT.”
RCEP negotiations are scheduled to continue today, with a goal of having an agreement in place by year’s end.
India has long fought against low-cost imports from its northern neighbors, despite producing its own primary aluminium at some of the cheapest amounts on Earth. Among the hurdles Indian producers face is ready access to bauxite ore, which is a problem Chinese producers have conquered thanks to agreements with various West African producers.