Aluminium Association of India Seeks RoDTEP Exemption, Flags Export Challenges

New Delhi, Mar 16 (KNN) The Aluminium Association of India (AAI) has urged the government to exempt aluminium products from the recent reduction in benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, saying the move would help Indian exporters remain competitive in global markets.

In a representation to the Directorate General of Foreign Trade (DGFT), the industry body requested that aluminium exports be excluded from the recent 50 per cent RoDTEP rate cut, similar to the exemption already provided to agricultural products, PTI reported.

Export Support and Industry Concerns

Launched in 2021, the RoDTEP scheme refunds taxes, duties and levies incurred during manufacturing and distribution that are not reimbursed under other mechanisms.  

The government recently issued a notification halving RoDTEP rates across sectors with immediate effect.

Earlier, aluminium exports were eligible for benefits of about 3 per cent for Domestic Tariff Area units and around 2.2 per cent for SEZ units.

AAI also urged the government to fix RoDTEP rates for 2026–27 based on the actual taxes borne by exporters so that aluminium producers, including SEZ units, are adequately compensated for embedded taxes.

Global Trade Pressures

The association noted that India’s aluminium exports, valued at around USD 7 billion and accounting for nearly two per cent of the country’s total goods exports, are already under pressure due to rising global trade barriers.

The industry is facing a dual challenge of shrinking export opportunities and rising imports into India. For instance, the Carbon Border Adjustment Mechanism (CBAM) proposed by the European Union could add costs of 7–50 per cent on aluminium exports.

Exports to the United States continue to face 50 per cent duties under Section 232 tariffs, while Mexico has raised customs duties on aluminium products to 10–35 per cent from January 2026.

At the same time, expanding Chinese-backed aluminium capacities in countries such as Indonesia are intensifying global competition.

Call for Fair Compensation

AAI said the industry has already submitted detailed data to the government committee recommending RoDTEP rates. Based on these submissions, unrebated taxes on aluminium exports are estimated at about 8–9 per cent of export value for Domestic Tariff Area units and 6–7 per cent for SEZ units.

(KNN Bureau)