A new CUTS International study has drawn attention to mounting input cost pressures confronting India’s secondary aluminium sector. This comes at a time when the country’s aluminium demand is projected to rise from 5.3 million tonnes to 8.3 million tonnes by 2030, amplifying the consequences of the current duty structure.
The report argues that the existing import duty regime is inadvertently straining MSMEs that sustain India’s manufacturing chain and are integral to the Viksit Bharat 2047 goal.
Housing important smelting, refining and downstream clusters in Nagpur, Chandrapur, Raigad and Pune, Maharashtra plays a critical role in the aluminium value chain. Thousands of MSMEs contribute to casting, fabrication and component production, supporting jobs and innovation.
However, the 7.5% import duty on primary aluminium has pushed costs upward, squeezing MSMEs that rely heavily on stable raw material pricing.
“This industry is deeply tied to livelihoods and regional economic balance,” an industry expert observed. “When costs rise, MSMEs bear the brunt and the wider value chain absorbs the shock.”
ASMA’s Navendu K. Bharadwaj said reducing duty would help downstream industries support key national development sectors like infrastructure, construction, automobiles and electronics.
The report highlights that domestic aluminium prices remain higher than global levels due to the duty structure, impacting the competitiveness of fast-growing industries such as renewable energy and electric mobility.
The paper suggests:
• Duty reduction to bolster the competitiveness of 3,500 downstream MSMEs.
• Correction of the inverted duty anomaly.
• Enhanced employment and export potential through stronger domestic manufacturing.
As India aspires to become a global manufacturing hub, the study concludes that rectifying duty distortions is vital to unlocking downstream growth in states such as Maharashtra, Odisha, Gujarat and Tamil Nadu.
