The Aluminium Association of India (AAI) has appealed to the Prime Minister's Office (PMO) to protect the domestic aluminium industry from a surge of low-quality aluminium scrap imports, according to a representation cited by BusinessLine. The association warned that rising global protectionism has left India highly vulnerable, threatening domestic investments and draining the exchequer. Imports surged to 3.48 million tonnes in FY26, resulting in a forex outgo of over ₹88,400 crore, the AAI stated.
Global Protectionism and Trade Barriers
The domestic aluminium industry is facing a severe 'double-whammy' scenario due to rising imports and declining access to export markets. The US has hiked Section 232 national security duties to 50 per cent, the EU is introducing the Carbon Border Adjustment Mechanism (CBAM) alongside safeguard investigations, and Mexico has aggressively hiked customs duties on Chapter 76 up to 35 per cent despite lacking primary smelting capacity, the AAI noted. Developed economies such as the US and EU are restructuring regulations to retain high-quality scrap while exporting low-grade material (less than 90 per cent aluminium content). Other nations like Malaysia and China are curbing imports of poor-quality aluminium scrap.
Impact on Domestic Industry
The Indian aluminium industry contributes nearly ₹30,000 crore annually to the exchequer and provides over 8 lakh jobs across India's hinterlands. The association warned that rising imports threaten over ₹3 lakh crore of planned investments by leading producers, which are expected to create more than 1 lakh jobs and double India's primary aluminium production capacity to 9 MTPA by FY33 to meet growing domestic demand.
Trade Measures Sought
AAI urged enhancing the basic customs duty (BCD) to curb the import surge. In a representation to the PMO, it sought the publication of the final draft standard titled 'Aluminium & Aluminium Alloy Scrap – Requirements & Conditions of Delivery'. This standard has been approved by NITI Aayog, BIS, JNARDDC and the BIS Working Group, to align India's quality standards with global best practices and prevent the import of low-quality aluminium scrap. The association also called for changes to aluminium scrap import duty only after the standard is published and grade-wise HSN codes are introduced, ensuring only high-quality scrap is imported.
| Metric | Value |
|---|---|
| Aluminium scrap imports FY26 | 3.48 million tonnes |
| Forex outgo on scrap imports FY26 | ₹88,400 crore (overall) |
| Forex outgo on scrap imports FY26 (recycling) | ₹40,200 crore |
| Current annual exchequer contribution | ~₹30,000 crore |
| Current jobs supported | ~8 lakh |
| Planned investments threatened | ~₹3 lakh crore |
| Target primary production capacity by FY33 | 9 MTPA |
Promoting Circular Economy
AAI sought promotion of the country's circular economy by establishing a robust domestic aluminium scrap collection and recycling ecosystem. This will reduce dependence on imported aluminium scrap, which led to a forex outgo of over ₹40,200 crore in FY26 alone. The association emphasised that the Indian aluminium industry is vital for economic growth and national security, and immediate measures are needed to safeguard it from the surge in low-quality imports.
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