FIMI pitches for 15 pc basic customs duty on aluminium, downstream products

New Delhi, Nov 20 (PTI) Ahead of the Union budget, miners' body FIMI has urged the government to raise the basic customs duty on primary aluminium and downstream products to 15 per cent to curb rising imports and safeguard domestic manufacturers.

In its key recommendations to the finance ministry ahead of the Union Budget 2026-27, the Federation of Indian Mineral Industries (FIMI) said that the country's aluminium manufacturing base faces severe pressure due to a surge in imports from aluminium-surplus countries, which are diverting their exports to India following the imposition of tariff and non-tariff barriers in other major markets.

FIMI cautioned that continued import inflows at lower duties could undermine domestic capacity utilisation and hinder investment in the sector. It called for policy intervention to create a level playing field for Indian producers against global competitors benefiting from protectionist measures abroad.

The federation highlighted ongoing and planned investments of more than Rs 1.5 lakh crore in domestic aluminium capacity, with an additional Rs 1.6 lakh crore in the pipeline to raise primary aluminium production to 7.2 MTPA by FY30 and around 9 MTPA by FY33, in line with the Aluminium Vision Document, released by the Ministry of Mines, earlier this year.

These investments are expected to generate over 8 lakh direct and indirect jobs and contribute significantly to India's broader industrial growth trajectory. This will significantly enhance the Government's 'Viksit Bharat' vision by building resilient supply chains.

FIMI expressed concern over the sharp increase in aluminium imports, particularly from China, Russia, ASEAN countries and the Middle East. Despite adequate domestic capacity, over 55 per cent of India's aluminium demand in FY26 is likely to be met through imports, it noted.

It also flagged the growing inflow of aluminium scrap, making India the world's largest importer due to the lack of Bureau of Indian Standards (BIS) norms for scrap and recycling. It urged the government to introduce quality standards for aluminium scrap in line with global benchmarks cited in the Aluminium Vision Document.

To address high production costs, FIMI recommended reducing customs duties on critical raw materials used in aluminium manufacturing. It said Indian producers face cost pressures from the inverted duty structure, multiple taxes and cesses, electricity duty, and high logistics costs..

Although India possesses abundant bauxite and coal reserves, domestic aluminium production costs remain among the highest globally, with taxes and duties alone contributing nearly 17 per cent of total production costs, the federation said.

FIMI urged the government to implement its recommendations to realise the full potential of the minerals and metals sector. The proposed measures, it said, would help revive mining activity, promote exports, attract fresh investments, create employment, and support the Make in India and Atmanirbhar Bharat initiatives. PTI SID MR