Aluminium body seeks safeguard duty on Chinese imports

The Aluminium Association of India (AAI) is contemplating to lodge a complaint with the government on cheaper Chinese imports that are expected to harm the domestic industry in the long-run.

“The industry body will soon approach the government with a demand to impose safeguard duty over and above the international benchmark prices on Chinese aluminium imports whose landed price itself is lower than the London Metal Exchange (LME) prices,” K S S Murthy, honourary general secretary, AAI, said here on Friday.

The association had made a similar plea a couple of years ago and this time it is serious on these imports, which are mainly coming into the automobile sector.

According to Murthy, China only follows Shanghai exchange prices of the metal that is always 10 per cent lower compared to LME prices. Also, the Chinese government provides 17 per cent export incentives to aluminium exporters.

“Now that the country has lost the European market even for dumping, it would be looking at other markets to gain higher export volumes including ours. What has happened to Europe that excessively depended on China for manufacturing products will also befall us if we are not cautious of the situation,” he said.

Since August, Chinese currency is up 1.38 per cent against the dollar, while the Indian rupee is down by 15.12 per cent. So, Chinese can virtually dump any commodity into the Indian markets as currency equation is in their favour.

According to Murthy, there was an investment potential to the tune of Rs 1.2 lakh crore in aluminium smelter projects and other downstream industry in the country by 2015 and the only way to make this happen was by protecting the domestic industry from cheaper Chinese imports, he said. Only those aluminium products that have a potential of 30-40 per cent value addition back in India must be allowed into the country.

India, though stands fifth in terms of bauxite reserves, has a lower consumption of the metal with electricity being the major consumer unlike automobile and building construction sectors in the US and other West countries. Efforts to increase the use of aluminium in the automobile sector by keeping higher benchmarks in terms of fuel efficiency and emissions are among the suggestions the association has been making to the government.

The Centre is expected to adopt the Aluminium Mission Plan 2010-20, which features a technology road map, according to the AAI representative.

The association is organising INCAL 2011, the sixth international conference on aluminium, in Hyderabad from December 6-8.