India's Aluminium Industry Calls for Urgent Notification of Long-Awaited Scrap Quality Standards

The Aluminium Association of India (AAI) has submitted representations to the Ministry of Finance and the Ministry of Mines, urging immediate policy action to prevent India from becoming a destination for low-grade aluminium scrap.

AAI has highlighted that aluminium is no longer a conventional metal, but a future-facing strategic material used across power, transport, infrastructure, defence, aerospace, packaging, electronics, utensils and renewable energy. Any unchecked entry of aluminium scrap can therefore have a wider economic impact by affecting product quality, consumer safety, manufacturing competitiveness and the credibility of India’s aluminium value chain.

The industry body has called for a balanced response that protects genuine recycling operations while also curbing low-grade dumping. AAI has called for immediate fiscal interventions by maintaining Basic Customs Duty (BCD) on aluminium scrap at 2.5% till the Government of India publishes the pending BIS scrap quality standards and introduces grade-wise HSN codes so that high-quality scrap is clearly separated from inferior grades.

In its submissions, AAI said global economies are tightening their aluminium value chains by increasing tariffs (ranging from 15% to 50%) & non-tariff barriers on Chapter 76; furthermore promoting export of low-quality aluminium scrap (<90% aluminium content) while retaining high quality scrap in their country.

The US has raised its Section 232 duties to 50%, the EU is advancing CBAM and other safeguard-related measures, and countries such as Malaysia and China allow only higher-quality aluminium scrap imports. This is leading to global aluminium surplus & low-quality aluminium scrap being dumped into India. In contrast, India’s absence of a notified scrap quality standard risks making it an open market for substandard global scrap.

In response, AAI has sought immediate publication of the final draft standard, Aluminium & Aluminium Alloy Scrap - Requirements & Conditions of Delivery (Doc No. MTD 7 (20323) WC). The standard, according to the association, has already gone through detailed consultations involving NITI Aayog, BIS, JNARDDC, Ministry of Mines, Primary producers and Recyclers , but has remained pending for more than two years.

Key requests made by AAI include: Notifying the pending BIS scrap quality standard without further delay; introducing grade-wise HSN code mapping for aluminium scrap under HS 7602 in line with global economies; raise duty on low-grade scrap categories, specifically Grade 3 to Grade 7, to 7.5% after publication of the standard and HSN mapping.

AAI has proposed a balanced solution - to maintain status quo on Aluminium Scrap (HS 7602) import duty (2.5%) until these safeguards are ready; and build a robust domestic scrap collection and recycling ecosystem to reduce import dependence & promote India’s goal of circular economy

It has warned that aluminium imports under Chapter 76 reached an all-time high of 3,479 KTPA in FY26, resulting in a forex outgo of ₹88,434 crore. Scrap imports alone stood at 2,028 KTPA, causing a forex outgo of ₹40,203 crore. The association said this trend threatens India’s self-reliance goals at a time when the domestic aluminium industry has invested around Rs 1.5 lakh crore over the past decade and is preparing more than Rs 3 lakh crore of new investments by Vedanta, Hindalco and NALCO. These investments are expected to double primary aluminium capacity to nearly 9 MTPA by FY33 and create over 1 lakh jobs.

The Association said early intervention by the Ministry of Finance and Ministry of Mines will help align India’s aluminium scrap regime with global best practices, protect responsible recycling, reduce avoidable forex outgo and safeguard India’s quality reputation in a metal that is central to the country’s future economy.