Indian Industry Calls for Elimination of Aluminium Scrap Import Tax Amid Supply Challenges
The Material Recycling Association of India urges the Prime Minister's Office to abolish a 2.5% import tariff on aluminium scrap, citing rising costs and strong demand. This change is vital as the secondary sector, which relies on imported scrap, constitutes nearly 40% of India's total aluminium supply.
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The Material Recycling Association of India (MRAI) has requested the Prime Minister's Office to eliminate a 2.5% import tax on aluminium scrap to alleviate rising costs for small and mid-sized recycling firms. India imports 85% of its scrap needs, primarily from the EU, U.S., and Middle East, and the secondary sector accounts for about 40% of the country's aluminium supply, approximately 2.2 million metric tons annually.
Current supply issues due to EU export curbs and geopolitical tensions further exacerbate these challenges. The MRAI argues that removing the tax would enhance competitiveness and support downstream manufacturing.
Additionally, aluminum recycling is crucial for reducing energy consumption in production, as it uses 95% less energy than extracting metal from bauxite. Without significant improvements in domestic scrap collection, imports will remain essential to meet projected aluminium consumption increases by FY30.
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