FinMin considering imposing MIP on aluminium imports

Government is considering imposing
a minimum import price on aluminium to help stem a surge in
cheaper shipments coming from overseas hurting domestic
manufacturers.
Revenue Department in the Ministry of Finance is studying
the case made by domestic manufacturers led by Vedanta, Nalco,
Hindalco and Balco for imposing minimum import price (MIP).
Chief executives of domestic manufacturers met Finance
Minister Arun Jaitley on August 18, with their demand for
protection from cheaper imports.
They sought expeditious imposition of import restrictions
like MIP on aluminium import on lines of the once imposed on
steel, sources said.
China, the biggest producer and consumer of metals, is
exporting surplus aluminium amid weak domestic demand.
Vedanta CEO Tom Albanese said 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.
"Right now steel industry has a number of protections from
imports but only about 15 per cent of steel comes from imports
whereas 50 per cent of aluminium comes from imports in India.
So, you have much greater import penetration in the aluminium
sector than you have of the steel sector," he told PTI.
He said China has the world's biggest unutilised aluminium
production capacity. And considering that China subsidises
electricity, "if that Chinese capacity gets turned out with
subsidised power, it is likely we will see flood of new
imported aluminium coming into Indian market".
India, he said, had bauxite resources to produce aluminium
and should use that instead of resorting to imports.
In their representation, the aluminium industry told the
revenue department that primary aluminium producers have
incurred huge losses of Rs 4,025 crore in 2015-16 fiscal,
which was substantially higher than Rs 1,480 crore loss in
fiscal year 2014-15.
"The country is facing a situation wherein 50 per cent of
its demand is met through imports, particularly from China,
where aluminium industry is subsidised by the Chinese
government," the industry said.