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Informist, Monday, Sept. 8, 2025

 

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--Aluminium extrusion cos group head: Need safeguard against cheap imports
--CONTEXT: Aluminium extrusion cos group head Chopra's comments in interview
--Aluminium extrusion cos group head: Domestic capacity under-utilised
--Aluminium extrusion cos group head: High imports due to FTA concessions
--Aluminium extrusion cos group head: Remove FTA concessions for imports
--Aluminium extrusion cos group head:Need policy to aid domestic consumption
--Aluminium extrusion cos group head:Incentivise exports to compete globally

 

By Rajesh Gajra

 

NEW DELHI - The downstream part of the aluminium industry had over the years been a voiceless segment, unlike their basic metal and upstream counterparts whose issues were adequately addressed by the aluminium industry and policy makers, till the Aluminium Extrusion Manufacturers Association of India was formed around two years ago. Jitendra Chopra, president of the advocacy group, and also the managing director of Revaalco Industries Pvt. Ltd., said such an important sector was unorganised till recently, and it took him and his colleagues two years to bring around 250 producers from the largest ones such as Jindal Aluminium Ltd. and Hindalco Industries Ltd. to the smallest ones.

 

In an interview with Informist, Chopra talks about wide ranging issues affecting the aluminium extrusion sector from the crippling effects of dumping of cheap products from members of Association of Southeast Asian Nations which attract little or no import duty due to free trade agreements in force, and the absence of policy support and strategic initiatives from the government in terms of safeguard import duties, export incentives, and other measures, to the urgent need for realising that large Indian bauxite reserves are the growth engine for domestic production and consumption of downstream aluminium products.

 

The downstream aluminium industry engineers raw aluminium through extrusion or rolling and adds value for use in the end product. An aluminium extrusion manufacturer produces shaped aluminium profiles by heating and pressurising raw aluminium through dies. A die is a hard steel plate in which the desired profile's shape is cut.

 

CHINESE DUMPING

Chopra is very concerned about the disadvantages being faced by domestic aluminium extrusion industry due to the dumping of aluminium value added products by Chinese companies. "China is the most famous for cheap production," he said, adding China has bulk production capabilities in aluminium extrusion industry that can produce in 20-25 factories that India's existing 450 factories are currently producing.

 

Under India's free trade agreement with the Association of Southeast Asian Nations, there is zero or little duty on aluminium value added products imported from member countries such as Vietnam, Thailand, Indonesia, Cambodia, and Malaysia. There is no FTA with China. But, according to Chopra, a Chinese company sells its aluminium value added goods to, say, a company in Vietnam that just drills 2-3 holes, adds colour to it, or other minor value addition, and then puts the "Made in Vietnam" stamp on it, he said.

 

This then comes to India through the duty-free access route for value-added products under multiple harmonised nomenclature codes created by the government, according to Chopra. Further, apart from rerouting, Chinese have themselves set up manufacturing units in the ASEAN countries, he said.

 

This is a key reason why domestic aluminium extrusion producers are unable to compete on pricing and also the sole reason why imports account for more than 50% of the domestic demand, according to the chief of the advocacy group. As per data provided by the association, India's aluminium extrusion industry has an installed capacity of 3 million tonnes per year but the production is currently just 1.2 mln-1.3 million tonnes. The under-utilisation is due to imports which account for more than 1.5 million tonnes, according to the association.

 

But Chopra is not sure of the exact proportion of imports from ASEAN countries which are actually Chinese in origin. "I don't have that data, but the maximum is coming through ASEAN," he said.

 

URGENT MEASURES NEEDED

Chopra said there are 2-3 things that need to be done urgently to create a level-playing field for the domestic industry which, in turn, will be an enabler of consumption of India-made products in the country. A minimum of 5-8% safeguard duty on the cheap imports by the government is the first thing that will help, according to Chopra.

 

The second thing needed is an expunction of downstream aluminium or value added products from FTAs, he said. Apart from the FTA with ASEAN, Chopra points to the one with the UAE where the import duty, currently at 3.5%, is being reduced by 150 basis points every year till it reaches 0%. The UAE is not a manufacturing hub for aluminium value added products right now,but many plants are being set up and likely to start operating in 1-2 years, he said.

 

An aluminium extrusion producer uses ingots or scrap as raw material. These can be either sourced from domestic producers or imported. India charges a 2.5% import duty on scrap and 7.5% on other raw materials, according to Chopra. But in other countries, there is almost no duty on imports of these raw materials, he said.

 

The dynamics get further worsened because the government levies an import duty of 7.5% on finished aluminium value added products which come into the country without FTA-related exemptions. For domestic manufacturers, the raw material costs are more than 15-20%. So, even without FTAs, according to Chopra, domestic manufacturers have to compete on an uneven field with importers.

 

Given these input cost challenges along with lack of global competitiveness, "how will your industry run?" he said. Countries which encourage domestic production will typically keep the rate of import duty on finished products higher than that on raw materials, according to Chopra. The micro, small, and medium aluminium extrusion producers cannot compete with cheap imports without policy interventions from the government, according to the association.  

 

WHY PROMOTE DOMESTIC?

Chopra points to the government tendering of unplasticised polyvinyl chloride windows, doors, and partitions, when it could also consider buying aluminium value added products for the same purpose. The PVC products are made from crude petroleum which is imported but the country has ample reserves of bauxite, used to make aluminium, according to the aluminium extrusion association's head.

 

Meeting domestic demand of aluminium value added products from local production will also generate employment opportunities from associated sectors in the country, according to Chopra. If you order an aluminium door or window it will first be treated, anodised, powder coated or wood coated, and the sublimation will be on top of it, he said.

 

Glass will be put inside the aluminium window frame and if it is an aluminium door you will put a handle on it, he said. All this will lead to increased consumption of domestic products from the glass, rubber, sealing product, hardware and other sectors in the economy, he said. Further, according to Chopra, at each step skilled job work will be required which will generate employment opportunities for skilled and non-skilled workers.

 

The aluminium extrusion association chief said China is successful today in metals production and exports because it understood the importance around 25 years ago. China discouraged the exports of bauxite and aluminium billets and ingots, and encouraged exports of downstream value added products, he said. The association wants a comprehensive domestic metals policy on similar lines as China.

 

Chopra said the recyclability of aluminium products is also an important factor. "You must have had a beverage can and thrown it away but it gets recycled and you can then perhaps see it in your mobile phone cover, the buses, the cars, even the rockets, since its life goes on and on," he said. "You are using our (aluminium extrusion) product every 30 minutes of your life," he said.

 

It is a big market, according to Chopra. The aluminium recycling rate is over 25%, according to data from the Indian Bureau of Mines.

 

TARIFF SHOCK

Higher consumption of aluminium value added products from domestic production will also help in reducing global tariff shocks, according to Chopra. The high US tariffs have currently hit the production of around 10% of the aluminium extrusion producers in the country who export their products to the US, Chopra said. The total exports of aluminium extrusion products are around $170 million currently, out of which around 55% is to the US, he said.

 

"If we want to compete in the international market or if we want to increase our exports (of aluminium value added products), the government has to give export incentives," Chopra said. The raw material cost and the overall cost of production for domestic downstream aluminium is very high, he said. Competing countries such as China gives exports incentives of 13-28% on aluminium extrusion products, according to Chopra. India should offer its domestic producers around 15-20%, he said.

 

ANOTHER CHINA ANGLE

There is one China dependency that aluminium extrusion producing companies endorse--the Chinese machines that are used in the production process. The domestic producers are tied up with Chinese sellers for cost-effective maintenance and repair work of the machinery.

 

Until five years ago, a Chinese seller would send some engineers over to Indian buyers for a few days who would cover the training and servicing needs of up to 10 domestic producers in one go. But restrictions on visas for the Chinese were put around five years ago, Chopra said. "They are not been given visas even now," Chopra said. This further increases the cost of production for the domestic aluminium extrusion manufacturers, he said.

 

Despite these challenges, the association has a positive long-term outlook for India's aluminium extrusion market. It believes infrastructure development, automotive industry, and other factors will drive significant growth in the medium to long term.  End

 

Edited by Akul Nishant Akhoury

 

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