An increase in import duties on aluminium entering India gained more momentum this week, as Union Minister Suresh Prabhu revealed that the country’s commerce ministry favors such a measure as a means to protect domestic manufacturers.
“That is a proposal to protect our domestic industry. The proposal is under examination and we support the proposal,” said Prabhu to a domestic news agency.
Prabhu elaborated by saying that his ministry has received complaints from India’s domestic aluminium smelters that foreign manufacturers have been dumping raw aluminium on the country, depressing prices.
India’s producers have long called for protective measures against importers of both primary and scrap aluminium, as inbound shipments continue to rise. At present, basic customs duty on primary aluminium is 7.5 percent, while the duty on imported scrap aluminium is 2.5 percent.
Industry trade groups continue to seek a 10-percent duty on both forms of imported aluminium.
In addition to raising import tariffs, the aluminium industry is also asking for a minimum import price and an import quota. Altogether, Indian aluminium smelters produce about 4 million metric tons of raw aluminium per annum, surpassing consumption by 400 thousand metric tons.
While India’s aluminium consumption is holding steady, imports continue to rise, especially that of scrap aluminium thanks to the lower import duty. In the first quarter (April through June) of the current fiscal year alone, imported scrap aluminium tonnage rose by 20 thousand metric tons.