Aluminium firms ask Delhi to pursue tariff exemption with US
Indian aluminium producers have sought exemption from the 10 per cent tariff on aluminium imports announced by the US administration. The US government has granted an exemption to Canada, Mexico and Australia.
The first two were exempted due to the North American Free Trade Agreement renegotiation. Australia was exempted because of bilateral strategic tie-ups.
The US government had said it would reassess the exemptions for the nations. US President Donald Trump said, “America will remain open to modifying or removing the tariffs for individual nations, as long as we can agree on a way to ensure their products no longer threaten our security.”
Domestic aluminium companies say India should be exempted, given its strategic ties with the US. The Centre should raise the issue with the US government.
The Aluminium Association of India (AAI) has written to the Ministry of Commerce and Industry.
“Leaders of the European Union and other close allies of the US, such as the United Kingdom, Japan and South Korea, are seeking individual exemptions. This should also be sought for India to support the aluminium industry since the tariffs will make exports uncompetitive,” went its letter.
AAI further said Indian exports to the US do not pose any threat to their national security, domestic industry or jobs. Instead, it caters to their demand for high-quality aluminium for their infrastructure, defence, automobile and aviation sectors.
“Our exports are minuscule — it is only 125,000 tonnes per year and 60 per cent of these are aluminium ingots. China and West Asia are exporting heavily to the US. The tariffs will have a sobering impact on Indian commodity markets,” said T K Chand, president of AAI and chairman, National Aluminium Company.
In 2017, the US had a capacity of producing 1.8 million tonnes (mt) aluminium. It produced 0.78 mt. Its total consumption was at 5.51 mt, of which 5.04 mt were fed by import.
Canada, Russia,the UAE and China together comprise 73 per cent of US’ aluminium import. India’s share in the basket was 2 per cent. During April-December, India exported barely 0.1 mt but it aspires to take the share to 5 per cent in the coming years. Indian aluminium export to the US is valued at $350 million a year. This means the producers have only 0.8 per cent share of the overall export of $42.2 billion.