India’s downstream aluminium manufacturers have formally requested the government to reduce customs duties on both primary aluminium and imported scrap, arguing that the existing tax regime is eroding competitiveness for micro, small, and medium-sized enterprises (MSMEs).
The industry body highlighted that while India’s per capita aluminium consumption stands at just 2.5 kg—significantly below the global average of 11 kg—the immediate bottleneck is not demand potential but sharply rising input costs driven by the current duty structure.
The appeal comes as the sector faces mounting pressure from elevated raw material prices, which are disproportionately affecting smaller producers who lack the scale to absorb cost shocks.
By targeting both primary metal and scrap imports, the manufacturers are signaling that the current policy framework may be inadvertently hindering the very industrial base it aims to protect.
The Aluminium Association of India (AAI) has previously raised concerns about the influx of low-grade scrap, suggesting that quality and cost issues are intertwined in the current supply chain dynamics.
For commodity traders, this development underscores the sensitivity of emerging-market industrial metals to policy shifts.
Any move by New Delhi to lower duties could tighten global scrap flows and potentially support prices for primary aluminium, depending on the scale of the adjustment.