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“To improve the cost structure of the Indian Aluminium industry and enhance competitiveness, it is requested to reduce the basic customs duty on the…critical raw materials,” the Aluminium Association of India (AAI) said.
In its suggestions to the government for the upcoming Union Budget 2020-21, the aluminium industry said the basic customs duty on raw materials like aluminium fluoride, caustic soda lye and green anode/pre-baked carbon anode should be reduced to 2.5 per cent from current 7.5 per cent.
“The high import duties on raw materials is a huge disadvantage for domestic aluminium producers which are heavily dependent on imported raw materials. It results in Indian finished goods (getting) costlier and uncompetitive in international markets, rendering negative protection against cheaper imports of finished products, and discourages domestic value addition within the country,” it said.
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The primary aluminium industry is facing a severe threat from the increasing import of aluminium scrap, which constitutes around 58 per cent of the total aluminium imports in FY 2019-20, resulting in forex outgo of Rs 17,200 crore, it said.
AAI has also asked the government to eliminate high cess on coal (Rs 400/MT) to support the power-intensive industries like aluminium and retain competitiveness of the domestic industry.
Finance Minister Nirmala Sitharaman will be presenting her second Union Budget on February 1.