India’s Recycling Sector Urges PMO to Scrap Aluminium Scrap Import Duty

A leading industry body representing small and mid-sized recycling firms has approached the Prime Minister’s Office (PMO), seeking the removal of the 2.5% import duty on aluminium scrap. In a letter dated March 26, the Material Recycling Association of India (MRAI) highlighted that the tariff is increasing input costs and putting pressure on working capital, particularly for MSMEs that depend on imported high-quality scrap to meet technical standards. India, a major global importer of aluminium scrap, sources most of its supply from the European Union, the United States, and the Middle East.

The appeal comes at a time when global supply chains are tightening due to the European Union’s planned export restrictions and disruptions linked to geopolitical tensions involving the U.S., Israel, and Iran. Aluminium scrap plays a crucial role across sectors such as automobiles, construction, cables, and packaging. The recycling-based secondary aluminium sector currently contributes nearly 40% of India’s total aluminium production of around 2.2 million metric tons annually, with approximately 85% of its raw material sourced through imports.

While the Ministry of Mines has previously flagged concerns over rising scrap imports impacting domestic primary producers like Vedanta, Hindalco Industries, and National Aluminium Company, the MRAI maintains that eliminating the duty would boost downstream manufacturing without harming primary output. The association also emphasized the environmental benefits, noting that recycling aluminium consumes up to 95% less energy than producing it from bauxite. With India’s aluminium demand projected to reach 8.5–9 million metric tons by FY30, experts say improving domestic scrap collection and urban mining will be essential to reduce import dependence.

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