New Delhi, Jan 11 (KNN) The high duty on certain inputs for aluminium production should either be rationalised or removed completely to boost the domestic industry’s cost competitiveness, said Aluminium Association of India (AAI) on Tuesday.

With the demand for aluminium all set to rise exponentially in India from the current 4 million tonne per annum (MTPA) to 10 MTPA by 2030, the industry body said an investment of nearly Rs 4 lakh crore would be required to scale up production capacities and adequately cater to the rise in demand.

Representatives from the aluminium industry have urged the government to intervene amidst challenges stemming from rising foreign imports, a declining market share and escalating costs.

The high cost of procuring raw materials is proving a major hindrance in attracting fresh investments, the aluminium-producing firms said.

AAI further pointed out that several key inputs for the sector, such as calcined pet coke, caustic soda lye and aluminium fluoride attract high duties of 7.5 per cent, which need to be removed completely, or rationalised to at least 2.5 per cent to boost cost competitiveness.

Currently, 20 per cent of the cost of producing aluminium arises from government taxes alone. This is stifling the development of the aluminium sector, including the domestic scrap landscape, it said.

Further, for the overall development of the domestic recycling landscape, it is crucial to prevent the dumping of low-quality foreign scrap in India.

At present, foreign scrap is not governed by any quality standards, presenting safety and environmental risks. The industry representatives have recommended that the necessary quality standards be imposed, along with a duty of at least 10 per cent from the current 2.5 per cent to act as a deterrent from making India a dumping ground of substandard foreign scrap.

Other key suggestions made by the AAI included rationalisation of railway freight for the movement of critical raw materials like bauxite, alumina and coal, along with priority in rail allocation to the aluminium industry, considering its must-run status.

The industry body also asked the government to consider the elimination of goods and services tax (GST) compensation cess to support power-intensive industries such as aluminium.

It also requested the government to ensure that the domestic market is not flooded by unchecked substandard imports in the form of scrap. Aluminium is a critical pivot around which revolve the fortunes of several critical industries essential to India`s rise, AAI said.

The Union Budget 2023 holds special significance as it presents an opportunity for the government to build a conducive environment to enable the continued development of the domestic aluminium industry, the industry body said.

Although the prolonged geopolitical conflict this year has upended hopes for long-term stability, Indian industry has been acknowledged as a bellwether for its economy, representing hope for continued progress amidst the turmoil.  (KNN Bureau)