08/07/26
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
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