AAI Calls For Rise in Customs Duty on Aluminum Scrap Imports

SEATTLE (Scrap Monster): The Aluminum Association of India (AAI) has demanded that the customs duty on aluminum scrap imports into the country be increased to 10%, from the current level of 2.5%. It must be noted that the country’s scrap consumption is almost fully dependent on imports. As per data, the share of scrap in total imports has increased sharply from 52% in FY16 to nearly 66% in FY22.

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The low import duty on aluminum scrap has resulted in heavy import volumes, despite the country having sufficient potential to generate adequate scrap domestically. Only aluminum scrap has low customs duty, when compared with 7.5% for primary aluminum and 7.5-10% for downstream aluminum, AAI said in a statement.

AAI pointed out that the basic customs duty on aluminum and aluminum scrap is not in line with other metals such as zinc, lead, nickel and tin. This has resulted in huge disadvantage for domestic aluminum producers. It urged the government to increase the tariff rate of customs duty from existing 10% to 15%.

The government needs to look into the import duty structure for aluminum urgently, so as to provide relief to the domestic industry, which has been reeling under pressure, struggling to revive itself from the pandemic impact. Incidentally, the aluminum industry has a key role to play in the nation’s ongoing decarbonisation efforts.