MRAI calls for repeal of aluminum scrap import duty

The Mumbai-based Material Recycling Association of India (MRAI) is urging the Indian government to reduce the import duty on aluminum scrap to zero, saying the move will promote sustainability in the industry. The association makes the appeal as officials prepare the budget for the next fiscal year.

According to MRAI, making aluminum from recycled metal emits only 0.3 million tons of CO₂ per ton of aluminum produced. That offers a sharp contrast compared with what it says is an average of 14 tons of carbon emissions per ton of aluminum made in primary smelters.

“Among the key challenges faced by the Indian aluminum recycling industry is paying the 2.5 percent import duty on aluminum scrap,” MRAI writes in a letter to Indian Finance Minister Nirmala Sitharaman.

"[Imported scrap] is a key raw material for aluminum recycling and the government should make it to zero until the quality material (scrap) is available in sufficient quantity in the domestic market.”

MRAI contends that many countries around the world have realized the importance of scrap, and that the demand driver for aluminum in the next several years is going to be substantially higher due to India’s projected higher growth of GDP and ambitious infrastructure development.

The production of primary aluminum also is associated with consumption of large volumes of natural resources, including bauxite ore and coal, and generates large quantities of byproducts.

“Aluminum recycling has become an important part of aluminum production in India because it is much less energy intensive than the production of primary aluminum,” MRAI says.

India is poised to need the scrap, the group adds. The nation’s current per-capita aluminum consumption of 2.5 kilograms (5.5 pounds) is rising to get closer to a world average of 11 kilograms (24.2 pounds).

“India’s aluminum recycling industry plays a pivotal role in harmonizing efforts to combat climate change and bolster environmental sustainability,” MRAI President Sanjay Mehta says. “Recycling helps to combat the climate crisis by limiting the use of raw materials, protecting natural resources like bauxite and reducing the waste going into landfills.”

“Government must provide a level playing field for the Indian aluminum recycling industry, as we believe primary and recycling aluminum [production] are contributing to the nation’s economy, and hence, if customs duties are applicable on import of scrap, then commensurate export duties on the basis of total cost to the country on primary products should also be levied."

“India needs to take decisive steps here when it comes to its goals toward sustainability and a low-carbon ecosystem," MRAI Senior Vice President Dhawal Shah adds. "World over, metal scrap, especially aluminum, is considered as the greenest raw material to be used for metal production. Having import duties on aluminum scrap could be retrograde and would decelerate our efforts in reaching these sustainability goals.”

Mohan Agarwal, managing director of recycled-content aluminum producer CMR Green Technologies, is urging the government to address the dual problem of Inverted duty structure and hugely deficient domestic availability.

In addition to aluminum, MRAI is urging the government to put a zero import duty level into effect on other types of imported nonferrous scrap, including copper, lead, zinc and brass, saying India does not have sufficient quantity of good quality metal scrap as of this year.