DGS rejects Indian primary producers' plea to impose safeguard duty on aluminium imports

There was no immediate threat of "serious injury" to the domestic aluminium industry from the shipments of aluminium products sailing in from China and countries in South East Asia and Middle East, said Directorate General of Safeguard, India, today in its final findings on 'safeguard investigation' concerning imports of 'Unwrought Aluminium (Aluminium not alloyed and Aluminium alloys).' Saying there was no need to impose a safeguard duty on certain aluminium products as sought by the primary producers like Vedanta and Hindalco, DGS rejected their contention outright.

The DGS, under the Finance Ministry, said there was data showing import decreasing over the last three years while production and sales of Domestic Industry (DI) have increased. As LME aluminium prices have reversed their downtrend trend to move upwards from US$1,563 during April, 2016 to US$1,735 in November, 2016, domestic primary aluminium producers now stand a good chance to get higher realisations from their sales in India as well as from exports. The depreciation of INR is also working in their favour, the DGS observed.

"There exists an injury to the DI but there exists no serious injury or threat of serious injury to the domestic industry...and hence no protection under the safeguard law is required," the DGS said.

The Government of India has already increased Custom duty on aluminium products from 5 per cent to 7.5 per cent from March this year providing the much needed relief to the domestic metal producers. Hence, in the wake of improving market scenario, safeguard duty on the product is "not recommended" right now, the DGS opined.

Hindalco Industries Ltd, Bharat Aluminium Company Ltd (BALCO), and Vedanta Ltd had moved the DGS seeking imposition of the safeguard duty on the imports of aluminium product to protect the domestic producers against the onslaughts of increased imports.

The DGS in its final findings on 'safeguard investigation' also noted that production, market share, domestic sales and productivity of the primary producers combined have improved and capacity utilization of DI is almost at 100 per cent.

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