MRAI Calls for Removal of 2.5% Import Duty on Aluminium Scrap to Support India’s Recycling Industry

According to industry reports, the Material Recycling Association of India (MRAI) has urged the Indian government to abolish the 2.5% basic customs duty (BCD) on aluminium scrap, arguing that the measure would strengthen the country’s recycling sector, lower production costs, and improve the competitiveness of downstream manufacturers. The request was made in a letter submitted to the Prime Minister’s Office (PMO).

India remains heavily reliant on imported aluminium scrap, with overseas supplies meeting around 80-85% of domestic demand, according to MRAI. The association said uninterrupted access to imported scrap is essential to sustain manufacturing activity and support the continued expansion of the country’s recycling industry.

MRAI noted that India’s secondary aluminium production has increased from 0.85 million tonnes in the 2015-16 fiscal year to nearly 2.2 million tonnes in FY2025-26. Recycled aluminium now accounts for approximately 35% of the country’s total aluminium consumption, reflecting the sector’s growing role in the domestic supply chain.

The association said removing the import duty would reduce raw material costs for recyclers, particularly small and medium-sized enterprises, while improving resource security and supporting the government’s circular economy objectives. It also highlighted the sector’s employment contribution, estimating that aluminium recycling supports around 700,000 direct and indirect jobs. Women account for nearly 46% of the skilled workforce involved in sorting, segregation, and processing activities.

“Removing the 2.5% Basic Customs Duty on aluminium scrap will strengthen thousands of MSMEs, generate employment, improve resource security, enhance the competitiveness of downstream manufacturing, and support the circular economy,” MRAI President Sanjay Mehta said. He added that aluminium scrap should be recognised as a strategic industrial raw material rather than being treated as waste.

MRAI also pointed to India’s tariff structure, noting that aluminium scrap remains the only major base metal scrap subject to import duty, while copper, zinc, and lead scrap have already been exempted.

The association said several Asian economies, including Thailand, Malaysia, Indonesia, Japan, and South Korea, allow duty-free imports of aluminium scrap, giving their recycling industries a cost advantage in global markets.

Source: The Economic Times

SUNSHINE Spotlight: MRAI’s proposal underscores the recycling industry’s push to classify aluminium scrap as a strategic raw material and align India's import policy with other major recycling markets.