NEW DELHI: To protect domestic industry from cheaper metal imports from countries like China, the Mines Ministry has asked the Finance Ministry to hike import duty on aluminium to 7.5 per cent.
The import duty on aluminium is 5 per cent, at present. “The Mines Ministry has written to the Finance Ministry to hike the import duty on aluminium to 7.5 per cent from 5 per cent,” Mines Secretary Balvinder Kumar told PTI. Kumar said the proposal has been made to protect the interests of the domestic industry which is faced with cheaper imports.
Aluminium industry leaders recently met Finance Minister Arun Jaitley and requested him to raise import duty on the metal to check cheap imports from China, a scenario that can impact investments worth Rs 1.2 lakh crore.
The delegation from industry body Aluminium Association of India was led by Vedanta Group CEO Tom Albanese, HindalcoBSE -0.19 % Deputy Managing Director D Satish Pai and Nalco CMD T K Chand.
Primary aluminium producers — Vedanta, Hindalco and Nalco — have invested around Rs 1.2 lakh crore to increase the production capacity from 2.1 million tonnes per annum (MTPA) to 4.1 MTPA by 2018-19 fiscal, as per the industry.
The present situation on account of cheap imports from China is impacting investments and government needs to check this, the domestic producers has said. Recently Balco, a part of Anil Agarwal-led Vedanta Ltd, had said that it shut down its aluminium rolling business due to steep fall in prices of the metal, besides dumping from China and falling margins.
Primary producers are ruing that production cost of aluminium is around $2,000 per tonne, while prices at the London Metal Exchange (LME) have slumped to $1,600 a tonne. LME prices had come down to $1,660 per tonne in June, 2015 from a peak of $2,555 a tonne in June, 2011.
According to industry data, total imports to India have grown by more than 159 per cent to 1,563 kilo tonnes (KT) in 2015 as against the import of 881 KT in 2011, mainly from China and Middle-Eastern countries. This led to imports accounting for 56 per cent of Indian aluminium consumption in 2014-15, while products of Indian producers account for only 44 per cent.
China, which possesses more than 50 per cent of world aluminium production, is now exporting over 20 per cent of its products and their exports to India have surged by 200 per cent in 2014-15 as compared to 2010-11.
