Recycling industry body demands zero duty on aluminium scrap imports

New Delhi: Prior to the budget announcement, MRAI, which represents the recycling industry, has requested the government to eliminate the import tax on aluminium scrap in order to boost sustainability within the sector.

The recycling of aluminium scrap emits significantly less Co2 compared to the traditional smelting process, as per the Material Recycling Association of India (MRAI). One of the main obstacles confronting the Indian aluminium recycling sector is the 2.5 percent import tax imposed on aluminium scrap. MRAI stated in a letter to Finance Minister Nirmala Sitharaman that it is crucial for aluminium recycling and the government should reduce the duty to zero once there is enough quality material (scrap) in the domestic market.

Nirmala Sitharaman, the Finance Minister, is scheduled to unveil the complete Union Budget for the fiscal year 2024-25 in Parliament on July 23. Numerous nations have recognized the significance of scrap being sustainable due to its recyclable nature. India's expected GDP growth and ambitious infrastructure projects will significantly increase the demand for aluminium in the coming years. It was mentioned that the production of primary aluminum metal involves using large amounts of bauxite ore and coal and creating significant solid waste.

MRAI stated that the recycling of aluminium has become crucial in India's aluminium production as it requires significantly less energy compared to primary aluminium production. India's lower per capita aluminium consumption of 2.5 kg poses a challenge compared to the global average of 11 kg, leading the recycling industry to depend more on imports for high-quality aluminium scrap to make up for the deficiency.

India's aluminum recycling sector is crucial in aligning initiatives to address climate change and enhance environmental sustainability. Sanjay Mehta, President of MRAI, stated that recycling is effective in fighting the climate crisis by reducing the amount of raw materials used, safeguarding natural resources such as bauxite, and decreasing the quantity of waste sent to landfills. Decisive actions are required to achieve sustainability and a low carbon ecosystem. Across the globe, metal scrap, particularly Aluminium, is regarded as the most environmentally friendly raw material for metal manufacturing. Dhawal Shah, Senior Vice President of MRAI, expressed concerns that implementing import duties on Aluminium scrap could hinder progress towards sustainability goals.

The organization also requested no duty on copper scrap and brass scrap, currently subject to 2.5 percent duty, as well as zinc and lead, which currently have a 5 percent import duty.