The secondary aluminium industry has raised concerns over government’s comments to increase import duty on primary aluminium and aluminium scrap, the secondary aluminium industry.
In a letter to the commerce ministry, Sanjay Mehta, President of Material Recycling Association of India (MRAI), said, “Aluminium import is a necessity today. Certain critical auto components are manufactured through recycling of aluminium scrap which contains other required elements that come automatically with scrap. Primary aluminium cannot replace scrap in first place. Even if we try to replace scrap with primary aluminium, the cost of components will rise by upto 40 per cent which would increase overall production cost of auto sector.”
Currently, scrap import incurs duty of 2.5 per cent and import of aluminium ingot incurs import duty of 7.5 per cent. After representation of the primary aluminium producers, the government is considering to raise both duties to 10 per cent.
As per the reports in the media, the industry members have stated that domestic supply chains are not adequate to meet demands and the industry relies on the import of scrap. These are cost effective a well have lesser carbon footprint.
The industry maintains that increase in the import duty will make the manufactured goods costlier and adversely affect the MSMEs in the sector.