Aluminum Demand To Boost India’s Industrial Vision: IIFT Survey - GADGET-INNOVATIONS

Aluminum Demand To Boost India’s Industrial Vision: IIFT Survey

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Offering an insight into how the dynamics of India’s aluminum industry is expected to pan out, Indian Institute of Foreign Trade (IIFT) has compiled & released its survey which indicates that the demand for aluminum is going to rise in India to support India’s industrial vision of achieving 25% of GDP from manufacturing by 2022 under the “Make in India” initiative and as a result of increasing urbanization, development of industrial corridors, rural electrification, smart city projects, housing for all, and various other infrastructural projects.


The study proposes to provide an overview of the Indian aluminum industry; to analyze the efficacy of the present policies with a focus on the contemporary trade situation and recommend suitable policy options to enhance the competitiveness of the downstream industry vis-à-vis the dynamics of global demand and supply.


The study also discusses the rising requirement of “green” properties of the aluminum and awareness of the climate change related requirement to assess the future path for Indian Aluminum industry while World Integrated Trade Solution (WITS) SMART analysis has been conducted to build a hypothetical scenario to import high quality primary aluminum in India at lower tariffs with the reference case of Russia.


Overview of Aluminum Industry

Aluminum is the most abundant, naturally occurring metal in the earth’s crust in the form of bauxite ore. The aluminum industry is one of the essential sectors for countries to modernize as the metal is lightweight, durable and infinitely recyclable.


It serves many areas of application in the economy and is likewise vital to both the industrial and consumer sectors. On the industrial front, aluminum is mainly used in machinery, electrical power transmission equipment, construction and transport.


Aluminum is regarded as a strategic sector for India to move forward. It would support India to boost fuel and cost efficiency, especially in the Transportation, Electrical & Electronics, Building & Construction sector. As per NITI Aayog report of 2018, Aluminum will help India to serve its commitment to CO2 emission norms by adopting electric vehicles, which improves the share of renewable energy to 40% and beyond and promotes indigenization in defence equipment, aerospace, and aviation sectors.


An IBEF 2019 report says that the Aluminum industry is the second most important metallurgical industry in India. Over the course of the last four years, India’s aluminum production capacity has increased to 4.1 million MT, driven by investment worth Rs 1.2 lakh crore (US$ 18.54 billion). In 2019, India was the fourth largest producer of aluminum in the world with a share of around 5.33 percent of the global aluminum output.


Potential of Aluminum Downstream Sector

The Aluminum Downstream Sector holds great potential as some of the major sectors, where aluminum is used in abundance, have set up their growth plans. For example, Railways has committed $113 billion over the 5-year period with focus on enhancing safety of passenger cars, increasing speed of the trains and driving energy and cost efficiency. Apart from this, the transport sector is aiming high towards decreasing CO2 emission by faster adoption & manufacturing of Hybrid/ Electric Vehicles (FAME Scheme) and several other measures. Several other sectors also hold great potential for the aluminum sector.


The survey also highlights the challenges for the Indian Aluminum industry along with export potential and assesses the trade structure, competitiveness of Russia and trade Intensity with India, gives a detailed analysis of import tariffs and Effective Rate of Protection (ERP) in the Indian Aluminum industry and shares the future of Indian Aluminum industry.






New Delhi, March 15, 2021