FIMI Urges Customs Duty Increase of 15% on Aluminium as India Becoming Dump Yard for Low-quality Aluminium Scrap

Raipur, November 2025 : The Federation of Indian Mineral Industries (FIMI), the apex body for India’s mining sector, has submitted key recommendations to the Ministry of Finance ahead of the Union Budget 2026–27, calling for urgent policy intervention to safeguard the domestic aluminium industry. FIMI has recommended increasing the basic customs duty on primary aluminium and downstream products to 15%, to counter the sharp rise in aluminium imports and protect domestic manufacturing . India’s aluminium manufacturing base is currently under threat by a surge in imports from aluminium surplus nations driven by global tariff and non-tariff protectionist measures on aluminium.
The federation highlighted ongoing and planned investments of more than ₹1.5 lakh crore in domestic aluminium capacity, with an additional ₹1.6 lakh crore in the pipeline to raise primary aluminium production to 7.2 MTPA by FY30 and around 9 MTPA by FY33, in line with the Aluminium Vision Document, released by the Ministry of Mines, earlier this year. These investments are expected to generate over 8 lakh direct and indirect jobs and contribute significantly to India’s broader industrial growth trajectory. This will significantly enhance the Government’s ‘Viksit Bharat’ vision by building resilient supply chains.
Aluminium imports have surged in recent years, especially from China, Russia, ASEAN nations and the Middle East. Despite sufficient domestic capacity, nearly 55% of India’s aluminium demand in FY26 is projected to be met through imports. FIMI also expressed concern over the rising inflow of aluminium scrap. India has become the world’s largest importer of aluminium scrap due to the absence of quality and BIS standards for recycling and scrap imports, resulting in diversion of low-quality scrap chains from regions such as the USA, EU, UAE and UK into the Indian market. FIMI calls for quality standards on aluminium scrap in line with India’s Aluminium Vision Document which highlights existing global standards on scrap, and replication of the same in India.
To address cost pressures, FIMI has called for reducing customs duties on critical raw materials for aluminium production. Indian producers face high production costs due to expensive raw materials, an inverted duty structure, various taxes and cesses, electricity duty and high logistics costs. Although India has the natural advantage of being among the world’s largest holders of bauxite and coal reserves, domestic aluminium production costs remain among the highest globally. Taxes and duties alone account for nearly 17% of production costs, hampering the sector’s growth.
FIMI has urged the government to adopt these recommendations to unlock India’s full potential in the minerals and metals sector. Implementing these measures will help revive mining activity, promote exports, create employment and attract fresh investments, supporting the national goals of Make in India and Atmanirbhar Bharat.