Budget 2024: Aluminium makers urge govt to up import duty on scrap to 7.5%

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Aluminium producers have made a plea to the government to increase import duty on aluminium scrap to 7.5 per cent from present 2.5 per cent in the upcoming budget.

They have also sought maintaining the duty on primary aluminium imports at the current rate of 7.5 per cent or a marginal rise to 10 per cent.

The move would discourage the influx of sub-standard materials and safeguard the domestic industry which provides livelihood to over 10 lakh people.

In its representation to the finance minister, the Aluminium Association of India (AAI) has asked the government to control imports by fixing scrap import duty at par with that on primary aluminium, i.e. 7.5 per cent.
 

AAI has also called for maintaining the duty on primary aluminium imports at the current rate of 7.5 per cent or a marginal rise to 10 per cent, encompassing downstream products as well, in order to protect the domestic market from inundation of cheap imports.

Despite sufficient domestic production, primary aluminium imports continued to rise, registering 30 per cent increase year-on-year, driven by imports from China and free trade agreements with ASEAN and the Middle East countries. This influx hampers the viability of MSMEs in downstream production as well.

"Imports fulfilled 55 per cent of the country's aluminium demand in FY24, while the share of domestic producers plummeted from 60 per cent in FY11 to 45 per cent in FY24. Alarmingly, low-quality foreign scrap, which poses safety and environmental risks, has spiralled upwards from 472 kt (kilo tonnes) in FY11 to 1,768 kt in FY24, which is a whopping increase of 274 per cent," AAI said.