Aluminium industry seeks higher duties on low-grade scrap imports, protect domestic makers

The Aluminium Association of India has sought the finance ministry's support, citing shrinking export markets due to high US tariffs, rising protectionism in Mexico, Indonesia's capacity expansion, Russian dumping, and a surge in low-quality scrap and aluminium imports from Gulf and ASEAN countries.

In a representation to the Central Board of Indirect Taxes (CBIC), the association said since the world is using and promoting imports of only high-quality scrap, it is the need of the hour for India to establish similar quality standards.

It said that as major economies are protecting their domestic aluminium industries through higher import duties and other trade measures to attract investments, expand capacities and reduce import dependence, India should also strengthen safeguards.

It urged the government to continue the existing duty structure on aluminium products and consider higher basic customs duty and other trade measures to curb the surge in imports of poor-quality scrap, citing examples of countries such as Mexico, the US and Canada, where duties range between 15% and 50%.

The association has requested that the final BIS standard titled 'Aluminium & Aluminium Alloy Scrap - Requirements & Conditions of Delivery' be notified without changes, saying it has already been approved by bodies such as NITI Aayog and BIS.

It said that this will ensure that India does not become a dumping ground for unchecked quality of hazardous global aluminium scrap.

Once notified, it would classify aluminium scrap into different grades based on aluminium content, ranging from above 95% to below 60%, it said.

The association has urged the government to maintain the existing import duty on aluminium scrap until the pending BIS quality standard is notified and grade-wise HSN (harmonised nomenclature) codes are introduced.

This would allow the government to distinguish between high-quality scrap used by recyclers and lower-grade scrap with higher impurities, it said.

It also suggested raising the import duty to 7.5% on low-grade aluminium scrap (Grades 3 to 7) thereafter to curb imports of poor-quality scrap into the country.

"To restrict imports of poor-quality scrap, import duty on low-grade scrap should be enhanced to 7.5%," it said.

A calibrated customs duty framework, along with immediate notification of BIS scrap standards, will help protect domestic value creation while supporting quality-led recycling, it said.

According to data from the Ministry of Commerce, aluminium imports have more than doubled from 1.53 MTPA in FY15 to 3.48 MTPA in FY26, while the import bill has increased from ₹23,328 crore to ₹88,434 crore during the same period.

Scrap imports alone have risen from 840 KTPA in FY15 to 2,028 KTPA in FY26, resulting in a forex outgo of ₹40,203 crore.

"To promote India's circular economy goals of the secondary aluminium industry, it is important that the government establish a robust domestic scrap collection and recycling system. This will prevent forex loss caused by imports of aluminium scrap (₹40,203 crore in FY26)," it said.