 "Hindalco, Sterlite seek protection from dumping")
They’ve urged the government to review decisions on duty concessions in this regard. “A majority of copper and aluminium consumption in India in the past five years is met through imports. Have you heard of Saudi Arabia importing oil? Why should India, with the fifth largest bauxite reserves in the world, be importing more than 50 per cent of aluminium to meet our domestic consumption?” asked Satish Pai, managing director, Hindalco Industries, at the World Non-Ferrous Conference 2016, here on Friday.
India’s annual aluminium consumption is three million tonnes; production capacity is four mt. Nearly half the consumption is met by imports, mainly from China. The FTA schedule comes for review in 2018 and domestic producers are pressing to review the duty. It is a similar case with copper. Total installed capacity is nearly a million tonnes, against total consumption of 0.65 mt. And, around half the consumption is met through import, largely from FTA countries at one per cent duty. “In order to see growth in central India which possesses mineral resources, there should be a balance between ‘Make in India’ to ‘Made in India’ and not ‘Imported into India’,” said Pai.
The scenario might get accentuated after January 2017, once the FTA with the 10-nation Asean bloc gets implemented. This would allow import of finished products such as copper tubes at nil duty.
On major challenges for metals producers, Pai said, “Land acquisition, cost of capital and power, an inverse duty structure and logistics are major impediments for the growth of the base metals industry. In a scenario where interest rates are coming down, the cost of capital of between nine and 14 per cent is the highest in the world. Apart from that, Rs 400 a tonne of green cess is also again the highest in the world. The government should provide an equal playing field for metal producers to be cost-competitive with others in the world.”
Metal producers have asked the government to review FTAs signed with countries that produce no metal, such as Singapore.
A CRISIL study says the aluminium sector will grow faster than other metals in India, due to rising replacement demand from user industries. It forecasts healthy growth in aluminium consumption in India over the next five years, from 3.3 mt in 2015-16 to 5.3 mt in 2020-21. The primary demand for increased consumption is expected to come from the power sector, where aluminium is a cheaper and lighter substitute for copper in transmission and distribution. Over the next five years, investments from state distribution companies and central government schemes totalling Rs 4.3 trillion are being planned to expand India’s network in this regard.
