KOLKATA (miningweekly.com) – India’s Commerce Ministry is pushing for a hike in alumunium and aluminium scrap import duties in the forthcoming national Budget to offer protection to domestic producers reeling from a sharp spike in inward shipments of the non-ferrous metal.
There have been numerous representations from domestic aluminium refiners seeking import protection and the Commerce Ministry is supporting the proposal to increase import duties in the Budget 2019/20 slated to be presented before Parliament on February 1, government officials said.
Industry representations made to the government have sought a flat rate of 10% import duty on primary aluminium metal and scrap shipments to replace the current rate of 2.5% on scrap and 7.5% on primary metal.
However, while the various government departments involved are on the same page on the need to offer import protection to domestic aluminium companies, the timing of the import duty hike is still uncertain. The increase could be effected if the Indian government decided on placing a full-fledged Budget next month, which could incorporate changes in tariffs, but not if the government decided on placing just a ‘vote-on-account’ ahead of the elections, in which case a decision on higher import duty would be left for the new government when it placed a full Budget later in the year.
According to industry data placed before the Commerce Ministry, total Indian production of primary aluminium is pegged at four-million tons a year, against a consumption of 3.6-million tons a year.
The industry data show that total imports of primary aluminium during April to November, was up 22% at 1.56-million tons, with aluminium scrap imports up 20% at 0.88-million tons during the same period. Significantly, the highest inward shipment of aluminium scrap into the country originated from the US at 0.154-million tons, up 142% compared to the corresponding months of previous year.
The market share of imported primary aluminium and aluminium scrap increased to 60% during April to November, against 55% during the corresponding previous period, while the market share of domestic metal fell to 40% from 45% during the corresponding previous period.
Industry sources said that India has emerged as a dumping ground for aluminium scrap imported from the US as a fall-out of the trade war between China and the US, and the low import duty in India has made it an ideal destination for the glut in scrap.
The sources pointed out that while the Donald Trump administration increased the aluminium import tariff to 25%, China had retaliated by slapping a matching 25% duty on aluminium scrap imported from the US, with India having continued with a low tariff of 2.5%, opening the floodgates for scrap imports.