The Federation of Indian Mineral Industries (FIMI) has submitted recommendations to the Ministry of Finance ahead of the Union Budget 2026–27, calling for an increase in basic customs duty on primary aluminium and downstream products to 15 per cent. The industry body said the measure is needed to counter rising imports and support domestic manufacturers.
According to FIMI, the sharp increase in aluminium inflows from surplus countries has been driven by tariff and non-tariff measures imposed globally, resulting in diversion of material to India. The federation said the domestic aluminium sector faces pressure despite adequate installed capacity.
Rising imports and concerns over scrap inflow
FIMI said nearly 55 per cent of India’s aluminium demand in FY26 is projected to be met through imports. It highlighted significant inflows from China, Russia, ASEAN member states and the Middle East.
The federation also raised concerns about rising imports of aluminium scrap. Without domestic quality standards or BIS norms for scrap recycling, FIMI said India has become a major destination for low-grade material diverted from regions such as the United States, European Union, UAE and the United Kingdom.
FIMI recommended the introduction of quality standards aligned with global scrap norms, in line with the Aluminium Vision Document released by the Ministry of Mines earlier this year.
Investments and production capacity outlook
FIMI highlighted ongoing and proposed investments of more than ₹1.5 lakh crore in domestic aluminium capacity, with an additional ₹1.6 lakh crore planned. These investments aim to raise primary aluminium production to 7.2 million tonnes per annum by FY30 and about 9 million tonnes per annum by FY33.
The federation said these projects are expected to generate over eight lakh direct and indirect jobs and contribute to the government’s “Viksit Bharat” agenda by supporting supply-chain development and industrial growth.
Cost structure and duty corrections
FIMI said domestic aluminium producers face high production costs due to expensive raw materials, an inverted duty structure, multiple taxes and cesses, electricity duty and logistics costs. Despite India’s reserves of bauxite and coal, the federation said production costs remain among the highest globally, with taxes and duties accounting for nearly 17 per cent of total costs.
To address this, FIMI has proposed reducing customs duties on key raw materials to maintain cost competitiveness for domestic producers.
The federation said adoption of its recommendations will help revive mining activity, promote exports, create employment and attract new investment, supporting the national goals of Make in India and Atmanirbhar Bharat.
Source #ET
