New Delhi: Domestic aluminium extrusion manufacturers suffered an estimated annual revenue loss of up to Rs 14,700 crore, with about 20 factories shutting down over the past three years as operations became unviable amid intense competition from cheap imports, manufacturers' body ALEMAI said on Friday.
India's aluminium extrusion industry is under mounting pressure, with about 20 factories shutting down over the past three years and an estimated 50,000 jobs lost amid declining capacity utilisation and rising competition, the Aluminium Extrusion Manufacturers Association of India (ALEMAI) said.
Industry estimates indicate that capacity utilisation has fallen to as low as 30–40 percent, against an installed capacity of approximately 3 million tonnes. The combined impact of factory closures and reduced capacity utilisation has resulted in up to Rs 14,700 crore in annual revenue loss, it said.
Falling capacity utilisation is putting more pressure on micro, small and medium enterprises, affecting their ability to sustain operations, retain employment and compete in both domestic and international markets.
ALEMAI has identified the growing influx of low-priced imports, including those entering under preferential trade arrangements such as the India-ASEAN Free Trade Agreement, as a key competitive challenge for domestic manufacturers.
The association has welcomed the government's initiation of an anti-dumping investigation into aluminium extrusion imports from Malaysia, Vietnam and Thailand, recognising it as an important step towards addressing unfair trade practices and providing relief to domestic manufacturers.
However, ALEMAI maintains that trade remedial measures alone will not address the underlying cost disadvantages confronting the industry. It has urged the government to rationalise the existing 8.25 percent import duty on primary aluminium, arguing that the duty, combined with the country's import parity pricing mechanism, is the single biggest structural cost burden on India's downstream aluminium industry.
"Primary producers are making extraordinary profits at the cost of the downstream industry. We are the only developing economy that taxes its own raw material, and then we are surprised when our final product is uncompetitive at home and abroad. Protecting a few profitable producers while the manufacturing base is dismantled is not a viable industrial policy," ALEMAI President Jitendra Chopra said.
ALEMAI has called for a 10-year period of duty relief to provide the downstream industry with the necessary cost competitiveness and policy certainty to revive manufacturing, attract investments and strengthen India's domestic aluminium value chain.
"India has made significant progress in building primary aluminium production capacity. We must now focus equally on strengthening downstream manufacturing and retaining a greater share of value addition within the country. Rationalising the duty will help Indian manufacturers compete on a level playing field, encourage investments, protect MSME-led manufacturing and lay the foundation for a globally competitive aluminium value chain," Ankur Aggarwal, General Secretary, ALEMAI, said.
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