Aluminium Industry Seeks 15% Import Duty, Quality Norms To Shield Domestic Players
The Aluminium Association of India (AAI) is pressing the government to increase the basic customs duty on aluminium products to 15% and to enforce stricter quality control standards on scrap imports. In a letter to the Ministry of Finance and the Department for Promotion of Industry and Internal Trade (DPIIT) dated October 27, 2025, the AAI urged the government to shield the domestic market from becoming a dumping ground for global aluminium, especially amidst escalating geopolitical tariff and non-tariff barriers.
The AAI's request comes amid concerns that India is becoming increasingly vulnerable to aluminium being diverted from other markets, particularly as countries like the US, China, and Europe erect steep tariff and non-tariff barriers on aluminium imports. Currently, India imposes a 7.5% import duty on aluminium. The association has expressed concerns about rising imports over the past five years, forecasting a 72% increase to ₹78,036 crore in FY26 from ₹45,289 crore in FY22. If imports continue at this rate, investment plans of domestic aluminium players may be jeopardized, with imports expected to meet 55% of India's total aluminium demand in FY26.
The industry body warns that without immediate action, aluminium imports could account for 54% of India's domestic demand by FY26. To address this, the AAI has recommended implementing Bureau of Indian Standards (BIS)-aligned quality standards for imported aluminium scrap and rationalizing duties on raw materials to support domestic value addition. The AAI also seeks harmonized regulations to promote a circular economy and strengthen environmental safeguards. These measures would promote the recycling of domestic scrap and limit the import of lower-quality foreign scrap, thereby bolstering India's circular economy.
The surge in primary aluminium and low-grade scrap imports, particularly from countries with excess capacity such as China, has disrupted the domestic market and deterred investment in local production. High duties on essential raw materials have created an inverted duty structure, adding costs for domestic aluminium producers. The industry has recommended reducing customs duties on several materials to alleviate this, potentially reducing production costs by up to 17% and enhancing competitiveness.
The aluminium sector has already invested over INR 1.5 lakh crore to expand production capacity to 4.2 million tonnes per annum (MTPA). To meet an anticipated domestic demand of 10 MTPA by 2030, the industry will require an additional investment of INR 3 lakh crore over the next six years, potentially generating substantial employment within India. The AAI estimates that this additional investment to meet rising demand could create 2 million employment opportunities nationwide, aligning with the Prime Minister's “Atmanirbhar Bharat” (Self-reliant India) vision.
The Aluminium Vision 2047 classifies aluminium as a strategic resource for sectors such as defense, infrastructure, power, aerospace, and transport. India's aluminium demand is expected to rise nearly sixfold to 37 million tonnes by 2047, requiring investments of more than ₹20 lakh crore. The aluminium sector has created over 800,000 direct and indirect jobs and supports over 4,000 MSMEs. Projects worth approximately ₹2 lakh crore are already in the pipeline.
The AAI's call for increased import duties and quality norms reflects the industry's concerns about maintaining a competitive domestic market, encouraging investment, and achieving self-sufficiency in aluminium production.
