A minimum import price (MIP) on primary aluminium imported into India may soon be a reality according to sources within the Indian government.
India’s state-run engineering consulting firm Metallurgical & Engineering Consultants (India) Limited (MECOM), who was commissioned by the Aluminium Association of India to study solutions for protecting the domestic aluminium industry, returned a recommendation last week that the government impose a MIP on aluminium entering the country. Mecom is also preparing to return the results of a study on trade remedies and their ramifications upon the downstream aluminium industry in the next few days.
“We had detailed discussions over the first report of Mecon during the past few days,” said a senior government official speaking on condition of anonymity. “It has been decided that the ministry of mines may suggest MIP on primary aluminium products and we are soon going to write accordingly to the ministries of finance and commerce to take appropriate action.”
A second unnamed government official bolstered the comments made by the first quoted official.
“The ministry may seek imposition of MIP on aluminium. Also, Mecon is going to submit the second report by next week which will be discussed and conveyed to the finance and commerce ministries,” indicated the second official.
The Aluminium Association of India has long been asking for a MIP of 15% of the LME’s price on aluminium imports, but as yet to no avail.
Industry experts believe that imposing a MIP will be beneficial both in the short- and long-run for India’s aluminium industry
“MIP on aluminium could be brought in as we have seen the metal consumption falling in China. Also, an additional capacity of 4.5 million tonne (MT) is likely to come up in China and it would like to dump that in nearby countries,” said associate director at India Ratings and Research Pvt. Ltd Mahavir Jain.