Union Budget 2020-21: Aluminium Sector Seeks Support from Govt.

Samachar Digital Reporter

Chandigarh Jan. 19, 2021:- Even as Indian Aluminium industry is going through a challenging phase, Aluminium Association of India (AAI) has urged the central govt for support in the Union Budget 2021-22 through a number of demands. 

AAI said that first is the need to increase the basic custom duty on Primary Aluminium and Aluminium Scrap to 10%. This is necessary to battle current challenges being faced by the industry in sustaining the share of the domestic aluminium demand, which is today being imploded with imported aluminium – both scrap aluminium and primary aluminium.

Second is the elimination of cess on coal to support highly power intensive industries like Aluminium, pointed out AAI. There is a GST Compensation cess of Rs. 400 per metric ton which is a bone of contention and makes the cost of producing aluminium higher than the world average.

AAI further said that third is the reduction in custom duty on critical raw materials for aluminium industry value chain such as Calcined and Raw Petroleum Coke, Caustic Soda and Alumina.

These high input costs make Indian aluminium more expensive and uncompetitive in the global markets as compared to aluminium being produced by other countries thereby adversely impacting the metal’s export potential. This also encourages local manufacturers of aluminium goods to seek out import channels to meet their requirements, thereby making it a lose-lose for the country and the industry, maintained AAI.  

Meanwhile the Aluminium industry is under immense threat by rising imports, declining domestic market share, increasing production and logistics costs. These challenges have been further compounded by the COVID-19 pandemic which has adversely impacted the domestic demand for aluminium.