Aluminium Association of India pitches in for the domestic Aluminium Industry

In an effort to give a shot in the arm to the ailing domestic aluminium industry, the Aluminium Association of India (AAI) has taken a significant step forward by opening a dialogue with the federal government of India. The aluminium industry in India is going through turbulent times and the domestic manufacturers are bearing the brunt of the downturn in the global commodity cycle which has been further aggravated by huge imports from China & Gulf countries. This can also be attributed to the steady rise in imports, falling aluminium prices and increasing production costs. The industry is presently struggling with a debt of about Rs. 70,000 crores in the domestic scenario which has seen a massive investment to the tune of Rs. 1.2 lac crores in the past few years. The volatility of the LME prices have also abetted in the financial crisis that the aluminium industry is currently facing.

In the face of these odds, the AAI has sought help from the government on a three point proposal.

The appeal to impose a safeguard duty on primary aluminium metal. This will help in hedging the domestic manufacturers against the high volatility of the LME price index, increased logistics cost etc.
In spite of the current GDP contribution of 11% in the Mining & Quarrying sector, the aluminium industry has not been included in the list of Core Industries and the Harmonized list of Infrastructure. This has led to the industry missing out on the needed financial aid by the RBI and benevolent schemes aimed at the core industries. An appeal to include the aluminium sector in Core Industries & Harmonized List of infrastructure has also been raised.
Revaluation of the anti-dumping duty on Caustic Soda Lye which is a raw material for aluminium production. Presently, there is a high duty on the raw material which is impacting the cost of production for domestic aluminium. An appeal has been made to exclude the domestic primary aluminium manufacturers from this high duty.

As a representative body of the domestic manufacturers, if AAI is successful in achieving its proposals, the aluminium industry in India is sure to bounce back on its feet yet again.

*What do you think about the proposals? Be sure to mention you opinions in the comments below

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