Industry body Assocham has sought a reduction in basic customs duty and correction of inverted duty structure on critical raw materials for the aluminium industry as high import duties are a huge disadvantage for the sector heavily dependent on imported raw materials.

In its pre-Budget memorandum 2023-34, Assocham said high import duty on raw materials results in Indian finished goods getting costlier and uncompetitive in international markets, rendering negative protection against cheaper imports of finished products, and discouraging domestic value addition within the country.

“The average production cost of Indian aluminium producers is amongst highest in the world, majorly due to high incidence of unrebated Central & State taxes and duties on inputs/ raw materials accounting for 18-20 per cent of aluminium production costs,” the industry chamber said.

In a bid to improve the cost structure of the Indian aluminium industry and enhance competitiveness, the basic customs duty on critical raw materials should be reduced.

The industry body has sought a reduction of basic customs duty on calcined petroleum coke, caustic soda lye and green anode/prebaked carbon anode from 7.5 per cent to 2.5 per cent and on raw petroleum coke from 10 per cent to 2.5 per cent, among others.

India is struggling to retain competitiveness despite having the natural advantage of the fifth-largest bauxite and fifth-largest coal reserves in the world.

China encourages the import of raw materials at nil duty for aluminium production to promote domestic value addition and generate employment and forex with the export of finished aluminium products.