KOLKATA (miningweekly.com) – Indian domestic aluminium refiners are seeking tariff and non-tariff barriers to stem the rising tide of imports of the base metal into the country, which has led to lower sales by local metal producers.
Major integrated aluminium refiners in the country, including State-run National Aluminium Company and private producers like Hindalco Industries and Vedanta, made representations to the Mines Ministry earlier this week, seeking the imposition of quantitative restrictions on imports, as well as an increase in import duties on aluminium scrap and metal.
The producers said that quantitative restriction on imports should also be supported by mandatory end-use certification by the importer, apart from inward shipments of the metal contracted by automobile manufacturers.
Regarding tariff barriers, the companies sought that the government increase the import duty on aluminium scrap and primary metal to 10% from the existing basic duty of 5% and that the import duty on downstream aluminium value-added products increase to 12.5% from existing rate of 10%.
Justifying the demand for higher import barriers, the producers pointed out that aluminium imports during the current financial year had increased by 11%, while aggregate sale of domestic companies had fallen by 20%.
In the previous financial year, aluminium imports was estimated at 1.96-million tons, the highest ever inward shipment, accounting for 55% of domestic demand for the non-ferrous metal. Of the total inward shipment, aluminium scrap accounted for about 57% with estimated foreign exchange outgo of $2-billion.
It was pointed out that with the government earlier this week announcing hikes in import duties across products categorised as ‘non-essential’, to check the country’s import bill and the current account deficit - the difference between foreign exchange inflow and outflow - higher barriers for aluminium were also warranted, as domestic producers were well equipped to meet domestic demand without having to spend foreign currency and risk a higher current account deficit.
However, some in government said that the imposition of a quantitative restriction on aluminium imports would be a “tricky and sensitive issue” for the government, which was currently in trade negotiations with US Commerce Department officials on the imposition of tariffs on steel and aluminium imported into the US.
The officials said that India had been resisting the imposition of a quantitative ceiling on Indian exports of steel and aluminium to the US, as a pre-condition for the US agreeing to exempt Indian shipments from tariffs imposed by the Trump Administration.
While such negotiations and bargaining were ongoing between India and the US, the Indian government would face tough questions if it went ahead and agreed to impose a quantitative ceiling on imports of its own, the officials added.