Bhubaneswar: The Aluminium Association of India (AAI) has welcomed a recent decision by the Government of India to impose anti-dumping duties on anodized aluminium frames for solar panels and modules from China, as the move will provide relief to the downstream aluminium industry by enabling them with wider domestic market access.
In the runup to Budget 2025, stronger protections from imports to facilitate much-needed market access has become a key industry asking establishment of a self-reliant aluminium sector within India. This is expected to encourage new investments, leading to job creation, growth of MSMEs, and wider inclusion of remote areas into the socio-economic mainstream.
The domestic aluminium industry, which has been reeling under a massive spike in aluminium imports in the form of both primary and downstream products majorly constituting foreign scrap, has submitted several representations to the government in this regard. They have repeatedly called for more robust protections in the form of import duties on primary and downstream aluminium products from 7.5% to 10% and imposing a uniform duty of 7.5% on aluminium scrap to curb the inflow of low-quality scrap.
Recognising the detrimental effect of excessive imports, the Ministry of Finance notification announcing the anti-dumping duty notes that “the dumping of subject goods from the subject country has materially retarded the establishment of domestic industry”.The anti-dumping duty imposed under this notification will be effective for a period of five years. Aluminium producers say that similar protections are needed against excessive imports of primary and scrap aluminium to preserve the domestic industry and ensure capacity growth in tandem with the growth in demand, which is expected to touch 10 million tonnes by 2030.
Aluminium imports now comprise 54% of India’s total demand for aluminium. This represents a forex outgo of INR 56,291 crores, or 1% of India’s total import bill each year. The bulk of overall aluminium imports comes from China, the Middle East and increasingly from the US and UK in the form of scrap. Scrap imports into India, often of low quality as they are not governed by any quality standards, have risen to 2X levels from 869 KT in FY 15 to an estimated 1,825 KT in FY 25 in the absence of adequate government support and duty arbitrage.
This would contradict global trends in advanced economies, which have taken active steps to protect their aluminium industries as a strategic resource. For example, the US has previously imposed a 10% tariff on aluminium imports, while China imposed a 25% duty on aluminium scrap imports from the US, with added restrictions.US President-elect Donald Trump has now vowed to impose an additional 10% duty on Chinese imports once he takes charge, in addition to a 25% duty on products from Canada and Mexico. On the other hand, India has overtaken China as the largest aluminium scrap importer which is hampering the growth of the domestic aluminium industry.
The imposition of such anti-dumping duties is thus viewed as a positive step for the growth of the entire aluminium domestic industry. A spokesperson for the Aluminium Association of India said, “The imposition of anti-dumping duties reflects the government’s commitment to fostering a self-reliant and competitive aluminium industry in India. We are optimistic of similar measures in the upcoming budget to empower domestic aluminium producers, which will enable them to support the global energy transition and also induce them to invest in added capacity to meet the growing demand.”
The newly imposed anti-dumping duties shall promote downstream aluminium value addition in the country. If similar steps are undertaken by imposing just duty barriers, it will restrict aluminium imports in the country, encouraging domestic aluminium producers to invest in more capacity and contribute more effectively in the drive to build a ‘Viksit Bharat’.
