MRAI urges removal of 2.5 percent duty on imported aluminium scrap

The Material Recycling Association of India (MRAI) has asked the Prime Minister’s Office to remove the 2.5 percent Basic Customs Duty on imported aluminum scrap. The association argues that the duty increases working capital needs and raw material costs for thousands of domestic micro, small, and medium enterprises (MSMEs) involved in secondary metal processing.

Key Highlights

• MRAI requests removal of 2.5 percent duty on imported aluminum scrap.
• Secondary aluminum production in India is projected to reach 22 lakh tonnes by 2026.
• Recycling sector supports seven lakh jobs with 46 percent female workforce.
• Indian recyclers import up to 85 percent of raw materials for secondary aluminum.
• Recycled aluminum production uses 95 percent less energy than primary smelting.

Impact on Secondary Aluminium Sector

According to MRAI, secondary aluminum production in India has grown from 8.5 lakh tonnes in the 2016 fiscal year to nearly 22 lakh tonnes projected for the 2026 fiscal year. The recycling sector now accounts for about 35 percent of India’s total aluminum consumption. It supports an estimated seven lakh direct and indirect jobs. Women make up nearly 46 percent of the workforce in material sorting and processing.

Indian recyclers import 80 to 85 percent of their raw material requirements. MRAI notes that import duties on other base metal scraps, such as copper, zinc, and lead, have already been removed. However, aluminium scrap still faces the 2.5 percent duty, making it an exception and raising costs for domestic manufacturers.

Regional Competition and Automotive Demand

MRAI highlights that countries Malaysia, Thailand, Indonesia, Japan, and South Korea allow duty-free imports of aluminum scrap. This policy puts Indian alloy manufacturers at a cost disadvantage compared to regional competitors.

The association states that the policy change is crucial for the domestic automotive sector. Major vehicle manufacturers in India rely heavily on secondary aluminum for high-value components, including engine blocks, alloy wheels, and structural aluminum. Automotive demand for recycled aluminum scrap is growing at an 8.6 percent compound annual growth rate (CAGR). Ensuring a steady supply of raw materials is essential for local vehicle production lines.

Environmental and Strategic Considerations

Sanjay Mehta, President of MRAI, says that processing aluminum scrap as a strategic industrial raw material, rather than waste, would improve resource security. It would also boost the global competitiveness of downstream manufacturing in India.

Recycled aluminum production uses up to 95 percent less energy and generates 90 percent fewer carbon dioxide emissions compared to primary smelting from mined bauxite. MRAI argues that these environmental benefits support the case for removing the import duty.

The association’s request comes as the industry faces rising raw material, insurance, and freight costs. These increases have affected small and mid-sized suppliers, making policy support more urgent for the sector.

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CarBike 360 Says

​The removal of the 2.5 percent import duty on aluminum scrap could prove to be a pivotal step in strengthening India’s recycling sector. By reducing costs and improving material availability, the move would not only benefit recyclers but also support sustainable industrial growth. A timely policy revision could accelerate the transition toward a more resource-efficient and environmentally responsible economy.