The Aluminium Association of India (AAI) has formally appealed to the Prime Minister’s Office (PMO) to shield the domestic aluminium industry from a flood of low-quality aluminium scrap imports, according to a representation reported by The Hindu BusinessLine on July 3, 2026. The association warned that rising global protectionism is leaving India highly vulnerable, threatening massive domestic investments and draining the national exchequer.
The domestic industry faces a severe “double-whammy” scenario: rising imports combined with declining access to export markets. To curb the import surge, AAI urged enhancing the basic customs duty (BCD) on aluminium scrap.
Import Surge and Forex Drain
Aluminium scrap imports surged to 3.48 million tonnes in FY26, resulting in a forex outgo of over ₹88,400 crore, according to AAI’s representation. The association noted that dependence on imported scrap led to an additional forex outgo of over ₹40,200 crore in FY26 related to scrap alone.
| Metric | Value |
|---|---|
| Total scrap imports (FY26) | 3.48 million tonnes |
| Forex outgo on scrap imports (FY26) | ₹88,400 crore+ |
| Additional forex outgo on scrap (FY26) | ₹40,200 crore+ |
| Annual exchequer contribution by domestic industry | ≈ ₹30,000 crore |
| Jobs supported by domestic industry | 8 lakh+ |
| Planned investments threatened | ₹3 lakh crore+ |
Global Protectionism Context
AAI highlighted that the United States has hiked Section 232 national security duties on aluminium to 50%. The European Union is introducing the Carbon Border Adjustment Mechanism (CBAM) alongside safeguard investigations. Mexico has aggressively raised customs duties on Chapter 76 (aluminium) up to 35% despite lacking primary smelting capacity, the association said.
Developed economies such as the US and EU are restructuring regulations to retain high-quality scrap while exporting low-grade material (with less than 90% aluminium content). Meanwhile, Malaysia and China are curbing imports of poor-quality aluminium scrap, according to AAI.
“Due to the rising protectionism by developed economies, India is not just facing a major import threat from global aluminium surplus capacities but is facing imports of low-quality scrap due to absence of quality standards.”
Demand for Quality Standards and Higher Duties
AAI 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 (Bureau of Indian Standards), JNARDDC, and the BIS Working Group. It aims to align India’s quality standards with global best practices and prevent imports of low-quality aluminium scrap.
The association insisted that changes to aluminium scrap import duty should be made only after publication of the pending standard and introduction of grade-wise HSN codes. This would ensure that only high-quality aluminium scrap enters India.
Economic Stakes
AAI stated that the Indian aluminium industry contributes nearly ₹30,000 crore annually to the exchequer and provides over 8 lakh jobs across India’s hinterlands. Rising imports threaten over ₹3 lakh crore of planned investments by leading producers. These investments 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.
To promote a circular economy, AAI urged the establishment of a robust domestic aluminium scrap collection and recycling ecosystem. This would reduce dependence on imported scrap and curb the forex outflow.
For importers and trade policy professionals, the key takeaway is that India is poised to tighten scrap import regulations through higher duties and quality standards. The pending BIS standard and grade-wise HSN codes will likely reshape import compliance requirements. Businesses involved in aluminium scrap trade should monitor the publication of the standard and prepare for potential duty increases, which could shift sourcing strategies away from low-grade material.
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