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Aluminum imports causing FOREX drain – Aluminum Association of India

Metal News - Published on Fri, 21 Sep 2018

Image Source: SteelGuru
Business Standard reported that the Aluminum Association of India (AAI), which represents the entire spectrum of the Indian domestic industry that manufactures and trades in the metal, on Tuesday apprised the Prime Minister Office (PMO) of its concerns over cheap aluminum imports. The association says inward shipments of the metal are not just hurting the domestic industry but are also creating a foreign exchange outgo of about USD 4.5 billion, in a scenario of growing trade deficit. A top aluminum producer told Business Standard “We have made representations to the Finance Ministry, the Ministry of Mines and now to the PMO. They have accepted the letter and are also agreeing that there is injury to the sector due to the ongoing trade war between China and the US.”

In the letter to the PMO, the association stated that “The deficit in merchandise trade rose 50 per cent year-on-year to USD 162 billion in FY18, from USD 108 billion in FY17 and that imports grew 21 per cent surpassing export growth of 10 per cent during the period under review. In FY18, aluminum imports hit a peak of 1.96 million tonne, causing a forex outgo of USD 4.5 billion. If imports of non-essential aluminum products is stopped it can reduce trade deficit by the same quantum (USD 4.5 billion) and bring it down to 2.8 percent.’

Aditya Birla Group's Hindalco Industries, state-owned National Aluminum Co and Anil Agarwal-led Vedanta Ltd are the top three players of the domestic aluminum industry. Their combined annual output of four million tonnes can cater to the entire domestic market, where consumption is usually 3.1-3.6 million tonne. Excess production is exported by these companies. In such a situation, aluminum imports into India become totally non-essential.

In India, import of primary aluminum attracts a duty of 7.5 per cent; scrap import is at 2.5 per cent duty.

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Posted By : Rabi Wangkhem on Fri, 21 Sep 2018
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