MECON has recommended imposing safeguard import duty or minimum import price (MIP) of 15% on primary aluminium products.
The Consultant is appointed by domestic aluminium industry to recommend the duty, Aluminium Association of India constituting domestic aluminium manufacturers including Vedanta Ltd, Bharat Aluminium Co. Ltd and Hindalco Industries Ltd to whom the recommendations is submitted.
A senior government official said “The association has forwarded recommendation on imposing MIP at 15 percent of London Metal Exchange (LME) price on primary aluminum imports to the ministry of mines. The mines ministry has asked the association to send recommendations on secondary aluminium products as well so that they can be examined and forwarded to the finance ministry in one go,”
According to the industry body’s China is the world’s largest producer and consumer of metals including aluminium and it is dumping large volumes of aluminium amid weak demand in the country. The domestic aluminium industry argues that primary aluminium producers have incurred huge losses of INR 4,025 crore in 2015-16, substantially higher than INR 1,480 crore loss in 2014-15.
MECON was hired by the domestic industry soon after the commerce ministry rejected imposing MIP on aluminium citing it was not in accordance with the country’s trade rules. The country’s aluminium industry is pushing for a minimum 15 per cent safeguard duty on all aluminium imports including those from China and West Asia.
The Centre has provided relief through MIP to domestic steel manufacturers hit by cheap imports and global slowdown in commodity prices. The government in the Union Budget had increased duty on imported aluminium by 2% to 7.5 %. However, the local aluminium makers assert that this was offset by concurrent doubling of green cess on coal. Increase in cost of coal led to rise in power prices that constitute 40% of cost of production of aluminium .
~Sourced
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