Aluminum and copper industries share recommendations and expectations

Pre-budget meetings have started and the finance ministry is due to meet with the aluminum and copper industry association on Tuesday.

The Ministry of Mines recommended an increase in tariffs from 7.5% to 10% on primary aluminum products and downstream products between 10 and 12.5%, compared to 7.5% currently at 10%, have sources told CNBC-TV18.

The Aluminum Association of India, which includes Hindalco, Vedanta and NALCO, had called for an increase in tariffs for primary aluminum to 10% in the next budget, due to the import of 2.1 MT of products from primary aluminum in fiscal year 21 compared to domestic demand of 3.4MT and manufacturing capacity of 4.1MT.

“To ensure cost competitiveness, the national aluminum industry has requested government assistance in reducing basic tariffs and correcting the reverse tariff structure on critical raw materials, especially coke. petroleum, caustic soda, aluminum fluoride, alumina, etc. for the value of the aluminum industry. chain. We have also called for an increase in the tariff rate of the base tariff for aluminum and articles from 10 to 15%, in line with the steel sector, ”the Aluminum Association of India told CNBC-TV18.

He added that an increase in the basic tariff of primary aluminum from 7.5% to 10%, scrap aluminum from 2.5% to 10% and downstream aluminum products from 7, 5% to 10% was also requested.

The ministry called for a reduction in tariffs and a correction of the reverse tariff structure for important raw materials like calcined petroleum coke, crude oil tap, caustic soda lye, etc.

Sources say the Mining Ministry may have recommended a reduction in tariffs from 7.5% to 5% on raw materials for aluminum production. The industry stressed that the government should reduce tariffs and correct the reverse tariff structure on important raw materials like petroleum coke, caustic soda, etc., as an increase in production costs does not help. the industry to become globally competitive.
Interestingly this time, the Ministry of Mines also recommended a zero duty on the import of copper concentrate. This, after the copper industry has been lobbying for over 4-5 years. Most of the recommendations were made with the government’s emphasis on manufacturing in mind. In addition, copper and aluminum are the key metals in many newer areas of interest, such as renewable advanced chemistry cells, etc.
However, the industry’s demand for higher import duties on scrap aluminum and copper has not yet been taken into account by the ministry. The aluminum industry had pointed out that imports had increased to 66% in FY21, resulting in an outflow of 15,000 crore rupees and the copper industry had requested an increase in tariffs on the scrap metal for responsible recycling and to restrict the importation of inferior copper. to give up.
The aluminum industry has also indicated that the coal tax, which stands at Rs 400 per million tonnes (MT), needs to be streamlined to support the energy-intensive industry. This expectation arises from the fact that the GST offsetting tax on coal under the GST regime was only to be collected for the first five years, from July 1, 2017 to July 1, 2022.

(Edited by : Kanishka Sarkar)


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