Budget 2020: The report suggests that the country’s major fulfilment of Aluminium demand takes place by imports. The Aluminium imports constitute 58% in India meeting its demand whereas domestically produced Aluminium languishes at meagre 42%.
Budget 2020: Federation of Indian Mineral Industries has demanded significant changes in the government’s Aluminium import policy to protect domestic industries from the wrath of industries of China and ASEAN countries in the Budget 2020. The industrial body seeks restriction on Aluminium imports by increasing import duty up to 15% from the existing 10% on all aluminium products. According to its report, India is capable enough to manage its own demand from the indigenous aluminium albeit the government shows the willingness to invest in aluminium production. The report says the government needs to invest Rs 1.2 lakh crore which is approximately 0.5% of India’s GDP to tonk aluminium production to 4.1 megatonnes per annum from existing 2.1 mtpa.
The report suggests that the country’s major fulfilment of Aluminium demand takes place by imports. The Aluminium imports constitute 58% in India meeting its demand whereas domestically produced Aluminium languishes at meagre 42%. The report claims India had to lose Rs 38,200 of its foreign exchange which is 1.1% of the country’s import bill to Aluminium imports.
A change in the government’s approach towards accelerating Aluminium production can also open up massive employment opportunities, the report suggests. The desired growth in production of Aluminium may lead to over 8 lacs job creation as well as the establishment of up to 4000 SMEs in the downstream sector, the report further outlined.
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Aluminium consumption in India has seen a massive surge since the year 2011. The annual consumption of Aluminium has shot up by 80%, from 2207 kilo tonnes to 3972 kt and interestingly import of Aluminium has increased by double of demand by 164% from FY 2011. The aluminium import in FY 2019 increased to 2318 kt from 878 kt in FY 20111, the report added.
The Aluminium imports from China, ASEAN countries have surged significantly in recent years. These countries boost their domestic Aluminium Industry by providing subsidies, loans with cheaper rate of interest, substantially low power tariffs, beneficial gas allocation, easier tax norms & export duty. All these factors synergise to reduce their production cost massively. Subsequently, they can afford to export their Aluminium at competitive rates to India and other countries suppressing their domestic industries.