The Indian Ministry of Commerce is considering raising the import tariffs on primary aluminum and scrap aluminum in the new fiscal year to curb the rapid rise in aluminum imports and protect domestic manufacturers.
Many aluminum smelting companies in India are seeking import protection, and the Ministry of Commerce plans to raise import tariffs in the 2019/20 fiscal year budget submitted by the parliament on February 1.
At present, the import tariff rates for raw aluminum and scrap aluminum in India are 7.5% and 2.5%, respectively, and the aluminum industry representatives are all required to increase it to 10%.
However, although the relevant government departments have agreed to protect domestic aluminum companies, the time for raising the tax rate has not yet been determined. If the government provides a full budget vote next month, the tax rate policy will be implemented immediately, but if the entire budget is discussed in the next fiscal year, the tariff increase will be left to the new government to decide.
According to data from the Indian Ministry of Commerce, although the annual consumption of primary aluminum is only 3.6 million tons, the annual output is 4 million tons.
From April to November 2018, India's primary aluminum imports were 1.56 million tons, up 22% year-on-year; scrap aluminum imports were 880,000 tons, up 20%. Among them, imports from the United States were 154,000 tons, an increase of 142%. The market share of primary aluminum and scrap aluminum accounts for 60%, which is higher than the 55% level in the same period. Accordingly, the domestic market share has dropped from 45% to 40%.
According to industry sources, India has become the main target country for scrap aluminum dumping in the United States, mainly because of low import tariffs.