Prospects of Aluminium Industry in India and the reforms needed- Mr. Abhijit Pati

September 26, 2020, Korba: Aluminum industry is very important in the development of the country, where important projects like Make in India, 100 Smart Cities, 100 AMRUT Cities, 24-hour uninterrupted power supply, 100% rural electrification, domestic space program, achieving 100 GW solar power generation capacity are the backbone of an economy, making the nation self-reliant. Aluminum sector has capabilities to play a major role in the growth of India. Mr. Abhijit Pati, CEO & Director, Bharat Aluminium Company (BALCO) expressed his thoughts as a key speaker addressing a webinar at the 24th International conference on Non- Ferrous Metals- 2020 on the ‘Prospects of Aluminium Industry in India & the challenges faced by the sector’. There were many other industry experts present in the webinar.

Addressing the audience & panel experts CEO & Director, Mr. Abhijit Pati said, “Aluminium, being infinitely recyclable, is referred as the “Green Metal”. It can be reused for the same purpose repeatedly and retains 100% of its properties during recycling. The Aluminium industry is the largest non-ferrous metal industry in the world economy and second largest metal industry after Steel. Aluminium consumption in India at 2.5 kgs per capita is much below the global average of 11 kg per capita. In China it is 25 kgs per capita. More developed countries have even higher per capita consumption of aluminium. Even at low consumption, aluminum contributes 2% of manufacturing GDP and this is expected to move up with consumption growth. This growth is critical for India’s industrial vision of achieving 25% of GDP from manufacturing by 2022.”

Mr. Pati also discussed about the challenges of raw material availability (Bauxite & Coal), High incidence of taxes, duties and cess, high Carbon Tax, Increasing Import of Aluminium and Scrap, declining domestic market share, inverted duty structure and high duties on raw materials as a huge disadvantage for domestic Aluminium producer’s dependent on imported raw materials, and unorganized domestic recycling industry due to lack of standards & the reforms required for strengthening the Indian industry.

Mr. Pati explained how Classification of “Aluminium Industry” as a “Core Industry”, as recommended by NITI Aayog and Mines Ministry, and formulation of National Aluminium Policy as recommended by NITI Aayog can place Aluminium industry on priority status. Also, pricing strategy for raw materials – coal and bauxite need to restructure to solve the prevalent issue of raw material security. He also suggested the much-needed reforms on guidelines for boosting domestic scrap recycling and achieving quality Standards for scrap usage/ imports and the ways export competitiveness can be enhanced in India through Remission of Duties or Taxes on Export Products Scheme exclusively for Aluminium industry

Indian Aluminium Industry has generated over 8 lakh jobs directly & in-directly and developed over 4000 SMEs in downstream sector. Aluminium industry has a strong output and employment multiplier effect (backward and forward linkages) on other key sectors. It has forward linkages with aviation, defense, auto, electricity, construction, packaging etc., and backward linkages with mining, refining, chemical industry, power, machinery. India’s 4th largest coal reserves and 5th largest bauxite reserves in the world along with its unique geographical location makes India a strategic location to become a major global low cost aluminium production hub and a major contributor to the nation’s GDP.