The user industry of primary aluminium has urged the Union government to rationalise the Customs Duty. India is the world’s second-largest producer of primary aluminium, which accounts for almost 80% of production costs for downstream manufacturers.
The 7.5% Basic Customs Duty on it has driven input costs up through the import price matching practices adopted by India’s primary producers. The downstream industry continues to operate at only 50% –55% of its installed capacity, according to a press release.
The downstream aluminium user associations have jointly appealed to the Union government to create a level playing field for the sector, in line with the roadmap laid out in the Aluminium Vision Document. “The downstream aluminium industry continues to operate under a duty structure that works against its competitiveness. We urge the government to rationalise the Basic Customs Duty on primary aluminium and aluminium scrap,” said Secretary of the Aluminium Secondary Manufacturers Association (ASMA).
The high cost of primary aluminium has led to higher cost of manufacturing for Indian MSMEs, and a lower demand for Indian products will lead to lesser investment in new and existing manufacturing capacity in the downstream sector, added a member of ASMA.
“A fair and rationalised duty structure on primary aluminium is essential to strengthen the entire manufacturing ecosystem rather than protecting any single segment of the value chain,” said secretary general of the Confederation of All India Traders (CAIT).
Government policy should enable the MSMEs to access industrial inputs such as aluminium at globally competitive prices, he said in the press release.
