MRAI wants scrap import duties scrapped

India’s growing aluminium recycling industry is demanding no taxes on scrap metal imports.

The Material Recycling Association of India (MRAI) president Sanjay Mehta says: The present regime is highly skewed in favour of primary producers.’

As in most countries, India is consuming more materials than are available from end-of-life products. ‘Hence, the recycling industry relies on imports of metal scrap to meet the shortfall to ensure sustainable business,’ MRAI explains.

Balancing act

‘We strongly urge the government to provide a level playing field for both the primary and secondary sectors,’ Mehta says.

‘For example, if customs duties are placed on scrap imports, then commensurate export duties on the basis of total cost to country on primary products should also be levied.’

Furthermore, standards for scrap material should be formed after consultation with the aluminium recycling industry. They should support recycling and should not be restrictive.

MRAI argues domestic primary aluminium manufacturers have the highest carbon intensity among global producers, with emissions of 14 tonnes of CO2 equivalent per tonne of aluminium.

Recycled aluminium emits only 0.3MT CO2 per tonne of recycled aluminium products.

Triggers for demand

India’s growing appetite for aluminium is mostly due to rising demand for recycled aluminium. This metal market witnessed around 10% compound annual growth between 2015 and 2023. This is significantly higher than the 2% growth rate for primary aluminium.

MRAI observes most demand stems from India’s automotive, power, railways, packaging, consumer durables and construction sectors. The organisation argues that recycled aluminium is vital to reaching a net zero economy by 2050.

Becoming self-reliant

Countries such as the UAE and South Africa have recognised that scrap is a critical raw material with legislation in place to prevent exports, making it virtually impossible for India to import scrap, MRAI points out.

MRAI expects this will be even more challenging after the EU Waste Management Rule comes into force for non-OECD countries in January 2025.

The organisation concludes India needs to have a strategy for enhancing scrap imports as more countries limit exports and domestic sourcing is limited. Mehta suggests policymakers should allow zero duty on metal scrap until India has realised sufficient quantity and quality of scrap.