Aluminium Association of India (AAI) requested the government for the continuation of Merchandise Exports from India Scheme (MEIS) with an improved rate from 2% to 5% for all aluminium products. In a letter to the Finance Minister and Commerce Minister to proceed with the processing of MEIS applications through Directorate General of Foreign Trade (DGFT) MEIS Portal. Written for the need of survival in the current economic situation and realising the Government's move towards cutting the funds expense for the scheme and diverting the funds for other purposes. The DGFT has also blocked the MEIS module from July 23, 2020 from accepting new applications to restrict the issuance of further scrips. This has created extremely unstable circumstances for the metal export which has declined by 11% from $5.7 billion in FY-19, to $5 billion in FY-20. 

The apex body has also demanded consideration of aluminium in Product Linked Incentive Scheme and implementation of Remission of Duties or Taxes on Export Products (RoDTEP) scheme on priority. However, this scheme is yet to be formulated and actualized by the Government.

 The Indian aluminium smelters are operating in the country at around 90% capacity. In addition, the slump in domestic and global demand is adversely impacting the sustainability & competitiveness of the metal industry. Furthermore, unrebated central & state taxes and duties, constituting around 15% of aluminium production cost which is amongst the highest in the world is negatively affecting the respective metal export. This is in sharp contrast to the global industry which is vigorously bolstered by significant aluminium producing countries specially China, by method of various incentives/subsidies for raw materials, tax benefits & export tax incentives, low interest rate loans and so on to upgrade the cost-competitiveness.

Government has recognized aluminium among 12 champion sectors, where India can be a worldwide pioneer and significant provider. With a potential to double the exports upto $10 billion forex earning in the near future. The domestic industry, through government support can remain competitive, boost exports, and survive this challenging phase.

For more information: www.aluminium-india.org