By Anil Mathews (ScrapMonster Author)
October 26, 2015 08:28:40 AM
NEW DELHI (Scrap Monster): Top officials of aluminum producing companies have urged the Indian government to hike import duty on aluminum, in a bid to safeguard the domestic industry. The government has hinted at raising the aluminum import duty from 5% to 10%. As a first step, the Mines Ministry is likely to forward the import duty hike proposal to the Finance Ministry.
According to industry veterans, the aluminum industry in the country is operating at nearly half its capacity. The sharp fall in aluminum prices along with other commodities has led to several shutdowns and capacity reductions. Aluminum majors in the country, after reporting huge loss in operations, have resorted to various cost-cutting techniques and job cuts. Recently, Vedanta had announced closure of its aluminum rolling mill operations at Korba plant, leading to layoff of approximately 750 workers.
The rising aluminum imports from neighboring China have damaged the local industry. The aluminum imports from China have surged by over 200% over the past four years. The imported aluminum now accounts for 56% of the domestic aluminum demand in the country.
According to Aluminum Association of India, the government must consider imposing anti-dumping safeguards on aluminum imports. The industry body has demanded rising of import duty on aluminum from 5% currently to 10%. Also, import duty on aluminum scrap which is currently at 2.5% must also be raised t0 10%, the association insisted.
The Association cited that import duty imposed on aluminum imports in the country is significantly lower when compared with Brazil and Russia, where import duties currently stands at 20% and 10% respectively. In addition, prevailing high energy and freight costs, lofty energy cess charges are a few among several factors that contribute to escalating production costs.