Base metals

India’s MRAI urges Delhi to end Al scrap import duty

India’s MRAI urges Delhi to end Al scrap import duty

Mumbai, 8 July (Argus) — The Material Recycling Association of India (MRAI) has urged the government to abolish the 2.5pc basic customs duty on aluminium scrap, arguing that the levy increases raw material costs for recyclers and downstream manufacturers at a time when the country remains heavily reliant on imports to meet growing demand. India's secondary aluminium production has expanded significantly over the past decade, rising from 0.85mn t in the 2015-16 financial year to nearly 2.2mn t in 2025-26. Recycled aluminium now accounts for about 35pc of the country's total aluminium use. But India continues to depend heavily on imported scrap. The country imports 1.8mn-2mn t/yr of aluminium scrap, taking about 2mn t in 2025 and 560,000t during January-April this year, according to Global Trade Tracker data. The MRAI estimates that imports meet 80-85pc of India's aluminium scrap requirement. The association attributes this to the country's historically low aluminium consumption of 3.3kg per capita, compared with the global average of 16kg, which limits the availability of domestic scrap. The local scrap ecosystem may take another 15-20 years to mature, it said, making imported material essential for recyclers, particularly small and medium-sized enterprises (SMEs). The association noted that aluminium scrap is now the only major base metal scrap category still subject to import duty after copper, zinc and lead scrap were exempted in the 2025-26 budget. Competing manufacturing hubs such as Thailand, Malaysia, Indonesia, Japan and South Korea allow duty-free imports of aluminium scrap, according to the MRAI. Several of these countries also export finished aluminium alloys to India under free-trade agreements at zero duty, creating what the association describes as an inverted duty structure that places Indian recyclers at a disadvantage. MRAI president Sanjay Mehta said eliminating the duty would strengthen SMEs, improve the competitiveness of downstream manufacturing and support India's ambitions of becoming a global hub for aluminium recycling and advanced material recovery. Recycled aluminium products already meet Bureau of India Standards (BIS) and international standards and are widely used by companies such as Tata Motors, Maruti Suzuki, Honda, TVS Motor, Tata Steel and JSW Steel. The association also highlighted growing restrictions on scrap exports in key supplier regions. MRAI senior vice-president Dhawal Shah said the EU, US, Gulf Co-operation Council countries and several African nations are increasingly seeking to retain aluminium scrap for domestic value addition, a trend that could affect India's supply security. The MRAI also cited the Secure Aluminium Supply Chains Act introduced in the US Congress, which proposes a review of the national and economic security implications of aluminium scrap exports. The US supplies roughly a fifth of India's imported scrap, while the EU accounts for around 22pc of India's aluminium scrap imports. In the Gulf region, the UAE has imposed a 100 dirham/t export duty on aluminium scrap and introduced a temporary ban on exports of certain recyclable materials, while Saudi Arabia levies a 5pc export tax. Together, the countries account for nearly 20pc of India's scrap imports. Similar export controls or duties have also been introduced in South Africa, Nigeria, Kenya and Ghana. Imported scrap remains critical to meeting rising demand from the automotive, construction, engineering and packaging sectors. Indian think-tank NITI Aayog projects that secondary aluminium will account for around 45pc of India's aluminium demand by 2028, the association said. The MRAI further argued that primary aluminium producers already benefit from a 7.5pc basic customs duty on aluminium imports and therefore do not require additional indirect protection through duties on scrap, a key raw material for the recycling industry. By Deepika Singh Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.