An Indian scrap metals trade group appealed to the government last week to remove the 2.5 percent import duty on aluminium scrap, setting aright the inverted duty structure on aluminium scrap now in place.
The Metal Recycling Association of India criticized the tariff, which is in place despite the assessment of no tariffs on finished and semi-finished products imported from elsewhere in Asia. The duty, says MRAI, hobbles many secondary aluminium producers from effectively competing with overseas producers, as aluminium scrap has become an ever-more-important source for the metal as the years have gone by. Aluminium scrap collection and sales supports over 10,000 small and medium enterprises in India, explained the Association.
India imports the vast majority of aluminium scrap, as domestic sources supply a mere 20 percent of the total demand. Aluminium penetration in the Indian marketplace makes scrap supplies hard to come by, as per capita aluminium usage is only 3 percent. The global average for aluminium usage is approximately 25 percent.
As a result, scrap imports from Association of Southeast Asian Nations (ASEAN) countries have steadily climbed year-on-year, topping 1.2 million metric tons. Imports of scrap aluminium have been largely driven by a significant increase in demand from the automotive industry. Elimination of the import duty on scrap aluminium will reduce overseas imports of the same, argues MRAI.