Secondary aluminium makers urge govt to rationalise primary metal import duty

New Delhi, Nov 20 (PTI) Secondary aluminium manufacturers on Thursday urged the government to rationalise the 7.5 per cent import duty on primary aluminium, a key raw material for downstream MSMEs, stating that the sector is facing a severe cost and competitiveness crisis driven by an inverted tariff structure and rising regulatory burdens.

The inverted duty structure is crippling small manufacturers who form the backbone of India's aluminium value chain, Navendu K Bhardwaj, member, Aluminium Secondary Manufacturers Association (ASMA), said in a statement.

"If raw material prices continue to stay artificially high, downstream industries cannot compete, neither in the domestic market nor globally," Bhardwaj said.

He said that high import duties inflate the domestic cost of primary aluminium, which forms up to 80 per cent of MSME production costs. At the same time, many finished aluminium products enter India duty-free under FTAs, making imported final goods cheaper than domestically manufactured ones.

India's primary aluminium market is highly concentrated among four large producers, enabling import-parity pricing linked to global LME benchmarks rather than domestic production costs.

Despite India being one of the world's lowest-cost alumina producers, MSMEs do not benefit from this advantage; instead, they face price rigidity, volatility, and shrinking margins. The growing regulatory burden arising from the non-ferrous metal import monitoring system and new Quality Control Orders (QCOs).

With the Government's Vision Document projecting aluminium demand to rise from 5.3 to 8.3 million tonnes by 2030, the secondary aluminium sector, dominated by MSMEs, will be central to meeting this growth, the statement said. PTI SID MR