KOLKATA (miningweekly.com) – Ahead of India’s national Budget to be presented before Parliament next month, aluminium producers are seeking a slew of protection measures.
Aluminium Association of India is seeking an increase in import duty on finished aluminium from 10% to 12.5%, considering that the domestic industry was “passing through challenging times, rising imports and fall in market share of domestic producers”.
In a statement, the Federation of Indian Chambers of Commerce and Industry (FICCI) said that “non-competitive energy costs and acute coal shortage faced by domestic producers had hit sustainability of aluminium companies”.
The FICCI also noted that, while over the past three years the domestic steel industry had been offered a range of protection from import competition through anti-dumping levies, periodic imposition of minimum import prices and non-tariff barriers like mandatory quality certifications, the aluminium sector had been deprived of any such protection.
The industry pointed out that during 2018/19, Indian aluminium imports were estimated at 2.3-million tons, or about 58% of total demand of the non-ferrous metal in the country. In contrast, various measures of the government for steel producers had led to a 21% fall in steel products shipped into the country over the last three financial years.
In view of rising input costs, aluminium producers have also sought a reduction in basic customs duty on a range of critical inputs like calcined petroleum coke, caustic soda, and coal tar pitch from a range of 5% to 10%, to a flat rate of 2.5%.
Even the National Institute for Transformation of India Commission has backed the industry’s claim of rising input costs. In a report, the government policy advisory body said, “among all the largest aluminium producing nations like Canada, Russia, Middle East and Norway, India has the highest cost of production. This can be attributed to high power costs in India. Coal cess alone accounted for a fifth of cost of mining of coal. Despite having a competitive advantage in coal, India is one of the most expensive places to produce coal-based electricity and this impacts a power intensive industry like aluminium.”
Citing this, domestic aluminium companies have sought that the government scrap the Rs400/t cess payable in the forthcoming national budget.
The industry in its representation to the government said that if India, with the fifth largest reserves of bauxite, was to maximise the resource and achieve the target of doubling domestic metal manufacturing capacity to seven-million tons a year, government would need to support it with the necessary incentives.
Creamer Media Senior Researcher and Deputy Editor Online