The Material Recycling Association of India (MRAI) has submitted a formal representation to the Prime Minister’s Office requesting the complete abolition of the 2.5 per cent Basic Customs Duty currently levied on imported aluminium scrap. The industry association stated that the ongoing tariff strains working capital and increases raw material costs for thousands of domestic micro, small, and medium enterprises (MSMEs) that depend on secondary metal processing.
According to data compiled by the association, secondary aluminium production in India has expanded from 8.5 lakh tonnes in the 2016 fiscal year to nearly 22 lakh tonnes in the 2026 fiscal year. The recycling segment now accounts for approximately 35 per cent of the country's total aluminium consumption and supports an estimated seven lakh direct and indirect jobs, with women comprising nearly 46 per cent of the workforce engaged in material sorting and processing.
The Association said that Indian recyclers rely on imports to fulfill 80 to 85 per cent of their raw material requirements. MRAI officials noted that while import duties on competing base metal scraps such as copper, zinc, and lead have been removed, aluminium remains an exception. The group further highlighted that regional competitors like Malaysia, Thailand, Indonesia, Japan, and South Korea permit duty-free imports of aluminium scrap, placing domestic alloy manufacturers at a cost disadvantage.
MRAI also added that the policy shift is highly critical for the domestic automotive sector, as major vehicle manufacturers remain heavily reliant on secondary aluminium for high-value components, including engine blocks, alloy wheels, and structural castings. With automotive demand for recycled scrap currently growing at an 8.6 per cent CAGR, supply of raw materials has become vital for localized vehicle production lines.
Sanjay Mehta, President of the MRAI, emphasized that treating processed scrap as a strategic industrial raw material rather than waste would improve resource security and enhance the global competitiveness of downstream manufacturing. Recycled aluminium production utilizes up to 95 per cent less energy and generates 90 per cent fewer carbon dioxide emissions compared to primary smelting from mined bauxite.