AAI urges government to reduce basic customs duty on critical raw materials
2020-01-13 13:43:42 [Print]
The Aluminum Association of India ("AAI") has urged the government to reduce the basic customs duty on critical raw materials like aluminum fluoride, stating that high import duties are a huge disadvantage as they make Indian finished goods costlier and uncompetitive in the international markets.
"To improve the cost structure of the Indian aluminum industry and enhance competitiveness, it is requested to reduce the basic custom duty on the critical raw materials," AAI said. In its suggestions to the government for the upcoming union budget 2020-21, the aluminum industry said the basic customs duty on raw materials like aluminum fluoride, caustic soda lye and green anode/pre-baked carbon anode should be reduced to 2.5 percent from current 7.5 percent.
"The high import duties on raw materials are a huge disadvantage for domestic aluminum producers which are heavily dependent on imported raw materials. It results in Indian finished goods getting costlier and uncompetitive in international markets, rendering negative protection against cheaper imports of finished products, and discourages domestic value addition within the country," it said.
AAI has also suggested to the government to increase import duty on "aluminum scrap (HS Code 7602)" at par with primary aluminum metal to 10 percent from the present 2.5 per cent in a bid to encourage recycling of domestic scrap and restrict increasing scrap imports. The primary aluminum industry is facing severe threat from the increasing import of aluminum scrap, which constitutes around 58 percent of the total aluminum imports in FY 2019-20, resulting in forex outgo of Rs 17,200 crore, it said.
AAI has also asked the government to eliminate high cess on coal (Rs 400/MT) to support the power intensive industries like aluminum and retain competitiveness of the domestic industry.
"To improve the cost structure of the Indian aluminum industry and enhance competitiveness, it is requested to reduce the basic custom duty on the critical raw materials," AAI said. In its suggestions to the government for the upcoming union budget 2020-21, the aluminum industry said the basic customs duty on raw materials like aluminum fluoride, caustic soda lye and green anode/pre-baked carbon anode should be reduced to 2.5 percent from current 7.5 percent.
"The high import duties on raw materials are a huge disadvantage for domestic aluminum producers which are heavily dependent on imported raw materials. It results in Indian finished goods getting costlier and uncompetitive in international markets, rendering negative protection against cheaper imports of finished products, and discourages domestic value addition within the country," it said.
AAI has also suggested to the government to increase import duty on "aluminum scrap (HS Code 7602)" at par with primary aluminum metal to 10 percent from the present 2.5 per cent in a bid to encourage recycling of domestic scrap and restrict increasing scrap imports. The primary aluminum industry is facing severe threat from the increasing import of aluminum scrap, which constitutes around 58 percent of the total aluminum imports in FY 2019-20, resulting in forex outgo of Rs 17,200 crore, it said.
AAI has also asked the government to eliminate high cess on coal (Rs 400/MT) to support the power intensive industries like aluminum and retain competitiveness of the domestic industry.
Fluorspar 97%min Delivered China
Unit:RMB/mt
China aluminum fluoride producers' sales to production ratio statistics by province by month
Unit: %
