Aluminium players mope over import spate, preferential treatment to steel

The aluminium sector stranded without government benefits, has seen imports soaring by 40 per cent in the last three years

Battling the global headwinds of imports and subdued London Metal Exchange (LME) prices, India’s aluminium industry has voiced its discontent over the preferential treatment meted out to steel makers.

As key metal commodities, both the steel and aluminium industries have faced the rising stream of imports over the past few years. 

The Union government’s flurry of interventions — declaration of minimum import price (MIP), putting in place safeguard duties, hiking basic customs duties and anti-dumping duties – have led to steel imports tumbling by 21 per cent over the last three years.

But the aluminium industry, which has been stranded without government benefits, has seen imports soaring by 40 per cent in the comparable stretch of time. 

In fact, the share of imports in domestic aluminium consumption at 58 per cent (in FY19) trumps all other major metals – steel (18 per cent), zinc (36 per cent) and copper (47 per cent). 

Moreover, steel enjoys the status of a ‘core industry’ and has the backing of government in the form of a ‘National Steel Policy’ rolled out in 2017 with production targets envisaged for 2030-31.

The non-ferrous aluminium segment lacks both — it is yet to win ‘core industry’ tag and has not been bestowed with an aluminium focused policy.

Rahul Sharma, vice-president, Aluminium Association of India (AAI), said, “Over the years, government interventions have helped steel imports tumble by 21 per cent. In addition to duty safeguards, the government has imposed MIP and anti-dumping duty.

Today, the steel industry is in fairly good health – it is able to run business and pay debts. But on the other side, for the aluminium industry, there was zero intervention from the government. Steel is a core sector but aluminium is a strategic metal which plays a vital role for the country – Make in India, for security, electrification and other applications.”

Sharma flagged concerns on unabated rise in scrap imports, especially with economic titans US and China waging a trade war. 

He added, “As a fallout of the trade war beginning with US imposing 10 per cent duty and China retaliating with 25 per cent duty (on scrap imports from US), India has turned into a favourite dumping ground for aluminium scrap. According to a report, India has dislodged China as the largest importer of aluminum scrap during the January-March period.