AAI warns India’s aluminium recycling push faces low-grade scrap dumping; seeks grade-wise HSN codes

INDIA – The Aluminium Association of India has urged the government to immediately notify pending BIS quality standards for aluminium scrap, proposing a differential duty structure that would raise tariffs on low-grade imports from 2.5% to 7.5% to prevent India from becoming a dumping ground for substandard material.

In representations to the Ministries of Finance and Mines, AAI warned that a surge in aluminium scrap imports, which reached 2,028 KTPA in FY26, accounting for a forex outgo of ₹40,203 crore (US$479 million), threatens domestic manufacturing competitiveness, product quality and consumer safety. 

Aluminium imports under Chapter 76 hit a record 3,479 KTPA in FY26, with total forex outgo of ₹88,434 crore (US$1.05 billion). 

Differential Duty Structure Aims to Protect Domestic Recycling Industry

AAI has proposed retaining the current 2.5% Basic Customs Duty on all aluminium scrap until BIS standards are notified and grade-wise HSN codes are introduced. 

Once standards are in place, the association wants duties on low-grade scrap categories, specifically Grades 3 to 7, raised to 7.5%, creating a clear fiscal distinction between high-quality and inferior material. 

The proposed BIS standard, titled “Aluminium & Aluminium Alloy Scrap – Requirements & Conditions of Delivery,” has already undergone detailed consultations involving NITI Aayog, BIS, JNARDDC, the Ministry of Mines, primary producers and recyclers but has remained pending for more than two years.

Global Scrap Controls and India’s Strategic Position

AAI cited tightening international controls as a key concern: the US has raised Section 232 duties on aluminium to 50%, the EU is advancing CBAM measures, and countries including Malaysia and China permit only higher-quality aluminium scrap imports. 

The result, according to AAI, is that low-quality aluminium scrap is being diverted to India.

Meanwhile, India’s secondary aluminium production has risen from 0.85 million tonnes in FY16 to nearly 2.2 million tonnes in FY26, accounting for around 35% of the country’s aluminium consumption. 

Recycled aluminium consumes up to 95% less energy and emits up to 90% less CO₂ than primary production, making it central to India’s Net Zero 2070 goals. 

The domestic aluminium industry has invested around ₹1.5 lakh crore (US$179 billion) over the past decade and is preparing more than ₹3 lakh crore (US$358 billion) of new investments expected to double primary capacity to nearly 9 MTPA by FY33.

AAI has also called for building a robust domestic scrap collection and recycling ecosystem to reduce import dependence and promote India’s circular economy goals.

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