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The Metal Recycling Association of India has urged the government to set right the inverted duty structure in the metal recycling industry by removing the import duty of 2.5 per cent on aluminium scrap.
The industry, which supports over 10,000 small and medium enterprises, wants the government to reduce the customs duty on aluminium scrap from 2.50 per cent to nil while finished and semi-finished products are imported duty-free from other Asian countries under free trade agreement (FTA).
The duty on scrap acts as a deterrent while facing tough competition from Asian countries. Imports of scrap into India have become costlier due to sharp rupee depreciation.
Aluminium scrap, which is the key raw material for secondary aluminium processors and automobile industry, is mainly imported. India generates only 20 per cent of aluminium scrap required as the per capita aluminium usage is low at 3 per cent against global average of about 25 per cent.
Aluminium alloy imports under FTA from ASEAN countries had increased to about 1.2 million tonnes due to boom in automobile industry. If the government reduces the import duty, imports from FTA countries will reduce significantly and help manage current account deficit, said the association.
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