In order to restrict cheaper shipment coming from overseas market, the government is contemplating to impose a minimum import price (MIP) on aluminium import. The petition for the same is filed by domestic manufacturers like Vedanta, Nalco, Hindalco and Balco to the Ministry of Finance, Revenue Department. Domestic manufacturers sought expeditious imposition of import restrictions like MIP on aluminium import on lines of the once imposed on steel.
The aluminium industry said that the primary aluminium producers have incurred huge losses of Rs 4025 crore in 2015-16 fiscal, which was substantially higher that losses Rs 1480 crore in fiscal year 2014-15. The country is facing a situation wherein 50% of its demand is met through imports, particularly from China, where aluminium industry is subsidised by the Chinese government. Industry further said that the increasing imports have rendered less than 60% capacity utilisation of primary producers and creating immense threat for the domestic aluminium industry.
Vedanta CEO Tom Albanese said that discussions are on with states and the government to find a long-term solution so that supply chain for the aluminium business is actually a domestic supply chain. Currently steel industry has number of protection from imports and only about 15% of steel comes from imports whereas 50% of aluminium comes from imports in India. There is much greater import penetration in the aluminium sector as compared to steel sector.
Albanese further said that China has the world’s biggest unutilised aluminium production capacity and is exporting surplus aluminium amid weak domestic demand and if that Chinese capacity gets turned out with subsidised power then there will be a flood of new imported aluminium coming into Indian market. He said India had bauxite resources to produce aluminium and should use that instead of resorting to imports.