Unfavourable Duty Structure As One Of The Challenges Faced By Aluminium Industry


Domestic aluminium manufacturers that include Vedanta Ltd, Hindalco Industries Ltd and National Aluminium Co. Ltd have requested the government for an exemption on the anti-dumping duty on caustic soda because of the competition from cheap China imports. Caustic soda is one of the important raw materials used in the production of alumna, the intermediate product used in the production of aluminium. Caustic soda is roughly 15% of the cost of alumna production.

Aluminium industry faces many challenges and among them is unfavourable duty structure. Imported aluminium is levied with 7.5% customs duty the same as the duty imposed on raw materials used in the manufacture of alumna. Another challenge is the imposition of anti-dumping duty on caustic soda which is being imported from India.

In a letter to mines secretary, Balvinder Kumar, anti-dumping duties are imposed to a country that dumps its goods to another country at a much lower price than what it charges at home. Custom duty on caustic soda is 7.5% whereas anti-dumping duty on imports from China, Korea, Saudi Arabia, Iran, US and Taiwan ranges from $8.75 to $133.6 per million tonne. The Aluminium Association of India has also hired Mecon Ltd., a government consultant to suggest minimum import price (MIP) for aluminium products.

At least 13% of the country’s caustic soda is consumed by the alumina industry; however, domestic caustic soda industry cannot supply the requirements of the alumina industry because of quantity, infrastructure and logistical constraints. The industry has no other option but to import the product from China where the aluminium industry is subsidized by the government.

The western part of the country is the major producer of caustic soda whereas the location of primary aluminium producers is in the eastern regions of Odisha, Chhattisgarth and Uttar Pradesh. Caustic soda production in India stands at 2.87 MT but domestic consumption requires 3.36 MT.

Aluminium parts manufacturer faces many challenges in the production of the weather resistant and durable material. However, demand for aluminium products is very high owing to its many advantages in home and commercial use. When it comes to windows and doors, consumers prefer aluminium because there is no distortion or bending.