PHDCCI Seeks Tariff Modifications to Strengthen India's Aluminum Industry

New Delhi, November 10, 2026: The PHD Chamber of Commerce and Industry (PHDCCI) has recommended a comprehensive set of customs duty rationalisation measures across the aluminum value chain in its Pre-Union Budget 2027–28 proposals, focusing on protecting domestic manufacturers, promoting recycling, reducing critical input costs and strengthening India's downstream aluminum manufacturing ecosystem.
India's aluminum industry witnessed strong domestic demand during FY2025–26. Aluminum consumption increased by approximately 11.4%, from 5.5 million tonnes in FY2024–25 to around 6.1 million tonnes in FY2025–26. In comparison, domestic production increased by approximately 1.4%, from 4.2 million tonnes to 4.3 million tonnes during the same period.
India's aluminum exports also declined by 5.9% during FY2025–26, reflecting the growing significance of domestic demand in the industry's overall market dynamics.
India, with aluminum production of approximately 4.3 million tonnes per annum, is the world's second-largest aluminum producer after China. The country's substantial bauxite reserves, with more than 50% concentrated in Odisha and Andhra Pradesh, provide an important resource base for domestic alumina refining and aluminum production.
Domestic aluminum demand is expected to increase from approximately 6.2 million tonnes in FY2025–26 to 8.0–8.5 million tonnes by 2030, creating significant opportunities for capacity expansion and downstream manufacturing.
Rationalizing customs duties on these essential inputs will help correct the existing tariff imbalance, reduce production costs and support capacity expansion. A competitive input duty structure is important for strengthening India's aluminum value chain and ensuring that domestic producers can effectively meet the country's rising demand said Anil Gupta, President, PHDCCI."
With this backdrop, PHDCCI has proposed the following seven measures to strengthen the domestic aluminum industry and improve its competitiveness.
1. Increase Basic Customs Duty on Primary Aluminum from 7.5% to 10%
PHDCCI has recommended increasing the Basic Customs Duty (BCD) on primary aluminium (HS 7601) from 7.5% to 10% to provide appropriate protection to domestic producers.
There has been significant increase in aluminum imports in recent years, particularly from countries with surplus production capacities. Rising imports could adversely affect domestic producers' market share, weaken investment incentives and increase the cost pressures faced by Indian manufacturers, thereby affecting their competitiveness against global producers.
Primary aluminum is produced through the smelting of alumina derived from bauxite, while secondary aluminum is obtained through the remelting of aluminum scrap. Primary aluminum is available in the form of ingots, billets, wire bars and wire rods, in both alloyed and non-alloyed forms.
These products are further processed through rolling, extrusion, drawing and forging to manufacture aluminum sheets, plates, foils, wires, tubes, profiles and other products used across automotive, construction, electrical, packaging, aerospace and engineering industries.
2. Increase Basic Customs Duty on Aluminum Waste and Scrap from 2.5% to 10%
Increasing BCD on aluminum waste and scrap (HS 7602) from 2.5% to 10% will encourage domestic scrap generation, strengthen recycling capabilities and improve the competitiveness of the secondary aluminum industry.
India's aluminum scrap consumption remains heavily dependent on imports despite the presence of significant domestic primary aluminum production capacity and the growing potential for local scrap generation. There is need to create stronger incentives for domestic recycling while addressing concerns relating to the quality of imported scrap.
Additionally, it was recommended to introduce stringent BIS standards for imported aluminum scrap to ensure that the quality of raw materials used by secondary aluminum manufacturers is aligned with the standards required by the domestic industry.
It has also highlighted that several countries, including China and Malaysia, have adopted stringent quality requirements for imported aluminum scrap, including minimum aluminum-content specifications.
Aluminum scrap is an important secondary raw material generated from manufacturing and fabrication processes, as well as discarded products such as beverage cans, automotive components, electrical wires, radiators, machinery parts and construction materials.
3. Increase Basic Customs Duty on Downstream Aluminum Products from 7.5%/10% to 15%
We propose increasing BCD on downstream aluminum products classified under HS 7603–7616 from the existing 7.5%/10% to 15%, with the objective of supporting domestic manufacturers and protecting investments in downstream processing and fabrication capacities.
Further, there are concern over rising imports of downstream aluminum products, particularly from China and countries with which India has preferential trade arrangements under Free Trade Agreements. Increasing import penetration could affect the utilization of domestic manufacturing capacities and weaken the investment outlook for Indian downstream aluminum producers.
Downstream aluminum products include powders and flakes, bars, rods, profiles, wires, plates, sheets, foils, tubes, pipes, structural components, containers, cables, household articles and other fabricated products.
4. Reduce Basic Customs Duty on Calcined Petroleum Coke from 7.5% to 2.5%
Reduce BCD on calcined petroleum coke (CPC) for anode making, conforming to IS 17049 (HSN 2713 12 10), from 7.5% to 2.5%.
CPC is a critical input in aluminum smelting and contributes to approximately 10–15% of the relevant input cost basket. PHDCCI has highlighted that the existing customs duty on CPC is comparable to or higher than the duty on finished aluminum, creating an input-cost disadvantage for domestic producers.
CPC is manufactured by heating green petroleum coke, also known as raw petroleum coke (RPC), at high temperatures to remove moisture and volatile matter. It is an important intermediate material in the aluminum, steel, titanium dioxide, foundry and carbon-material industries.
5. Reduce Basic Customs Duty on Raw Petroleum Coke from 10% to 2.5%
PHDCCI has recommended reducing BCD on raw petroleum coke for anode making, conforming to IS 17049 (HSN 2713 11 10), from 10% to 2.5%.
RPC is an essential raw material for manufacturing CPC, which is subsequently used in producing carbon anodes required for aluminum smelting. The Chamber has highlighted that customs duties on aluminum-grade RPC and CPC increase the cost of domestic aluminum production.
The industry also operates under import quantity restrictions, with RPC imports capped at 1.9 million tonnes and CPC imports at 0.5 million tonnes in FY2024–25, subsequently increased to 0.8 million tonnes for FY2025–26, as indicated in the sector's submissions.
6. Reduce Basic Customs Duty on Aluminum Fluoride from 7.5% to 2.5%
The Chamber has proposed reducing BCD on aluminum fluoride (HSN 2826 12 00) from 7.5% to 2.5%. Aluminum fluoride is an indispensable consumable in the aluminum smelting process and accounts for approximately 2% of production costs. We highlighted the need to rationalize its duty structure, particularly as it currently attracts the same customs duty rate as finished aluminum. Reducing the duty would help lower the input costs of domestic aluminum smelters and improve the overall cost efficiency of production.
7. Reduce Basic Customs Duty on Green and Pre-baked Carbon Anodes from 7.5% to 2.5%
PHDCCI has recommended reducing BCD on green and pre-baked carbon anodes (HSN 8545 19 00) from 7.5% to 2.5%.
The Chamber has highlighted that quantity restrictions on CPC and RPC imports constrain the availability of raw materials for domestic anode manufacturing. This limits domestic anode production and necessitates imports of finished or semi-finished carbon anodes, which currently attract a 7.5% customs duty.
Reducing the duty would help address the cost disadvantage faced by aluminum smelters and support the availability of essential consumables for domestic production.