Aluminium industry seeks govt support; looks forward to supportive measures in Budget

The aluminium industry has urged the government to increase the basic custom duty on primary aluminium and aluminium scrap to 10 per cent, eliminate the cess on coal among others as the sector is going through a challenging phase and is under immense threat by rising imports.

In a representation to the government ahead of the Union Budget for 2021-22, the Aluminium Association of India said, "The Indian aluminium industry seeks immediate government support to tide over this challenging phase and look forward for supportive measures in the forthcoming Union Budget 2021-22.

In this regard, it said the budget suggestions for aluminium industry are "increase in basic custom duty on aluminium scrap at par with primary metal to proposed 10 per cent, as in line with other non-ferrous metals like copper, zinc, lead, nickel, tin etc...elimination of cess on coal (GST Compensation cess of Rs 400/MT) to support highly power intensive industries like aluminium", among others.

The industry has also sought reduction in basic custom duty and correction of inverted duty structure on critical raw materials for aluminium industry value chain like aluminium fluoride and coal tar pitch.

"The Indian aluminium industry is going through a challenging phase and is under immense threat by rising imports, declining domestic market share, increasing production and logistics costs," it said.

These challenges have been further compounded by the COVID-19 pandemic which has adversely impacted the domestic demand for aluminium.

At the same time, the industry is not able to compete effectively in the global markets as the burden of central and state taxes and levies amounting to 15 per cent of aluminium production cost puts the domestic industry in a significant disadvantage compared to its global peers.

"In this context, the Indian aluminium industry under representation from Aluminium Association of India urges the Union Government for support," it said.

India is one of the fastest growing economies and fastest emerging markets in the world and aluminium industry plays a vital role in the nation's economy and the country's vision for an Aatmanirbhar Bharat.

Aluminium is an essential commodity for various other industries/SMEs due to its critical role in diversified applications crucial for economy like energy security, national defence, infrastructure, electrification, aerospace, automobile, consumer durables, packaging etc.

The Union Budget will be presented on 1 February.