Published by : Business World
India has a vast potential for increased aluminium consumption riding on Government initiatives comprising of make in India, smart cities, housing for all, rural electrification, dedicated freight corridors, high-speed railway networks, and many more.
In everyday life, one finds Aluminium being used in many applications, starting from consumer appliances, construction, automobiles, and packaging to space vehicles and more. As a versatile metal offering positive efficiency, safety, and durability, Aluminium is not just the fastest growing metal but also brilliantly caters to present-day requirements and complex engineering demands.
But unlike other worthy metals, the Indian Downstream Aluminium sector has long awaited its due or recognition. The lack of a policy framework has resulted in large-scale imports of downstream Aluminium at prices that domestic manufacturers cannot compete with.
Presently the downstream aluminium sector in India has around 2,500 players with a processing capacity of 3.9 million tonnes. It comprises both large and mid-size firms and a much more significant number of smaller and unorganized players. The industry has time and again voiced the need for a policy-driven focus by the government. The sector will primarily benefit from a policy that focuses on the entire spectrum and offers a level playing field.
Creating a policy for the downstream aluminium segment will be a game-changer and a definite boost for the country’s economy at large. India needs an approach that will put the downstream aluminium sector on the fast growth track. The Niti Ayog too has pressed for such a policy framework. In its report titled Need for an Aluminium Policy for India, the Niti Ayog has highlighted how compared to a world average of 11 kg, India has a per capita aluminium consumption of 2.5 kg, which is low. As far as consumption goes, a look at the global markets shows that the auto and transport sector accounts for 23% of aluminium consumption. Globally, this is followed by construction at 22%, packaging at 13%, electrical at 12%, machinery and equipment at 8.5% each. Consumer durables consume 4.5%, and other segments amount to 4%. In India, the power sector is the biggest consumer of Aluminium at 48%, followed by transport and automobiles at 15%, building and construction at 13%, and consumer durables having 7% aluminum consumption.
Consumption and demand will rise to benefit from a policy that addresses issues of the downstream aluminium segment. For instance, imported downstream products enjoy advantages under various export promotion schemes approved by the government of their originating countries. Having a policy that focuses on providing a level playing field to the domestic downstream aluminium manufacturing will help arrest its declining domestic market share due to subsidy-backed aluminium imports making their way into the country.
In continuing the trend of economic growth, aluminum consumption is expected to increase rapidly across sectors, especially with demand led by EV manufacturing which has received a push from the government. As the Indian Aluminium industry forges forward, only a specific policy will ensure that this demand is met by domestic downstream Aluminium and not by imports.
Further, India has a vast potential for increased aluminium consumption riding on Government initiatives comprising of make in India, smart cities, housing for all, rural electrification, dedicated freight corridors, high-speed railway networks, and many more.
But for this Indian aluminium growth story to shape uprightly, there is an urgent need for policymakers to recognize that only if a level playing field is provided to Indian local industry will it enable them to invest and grow in a viable manner.
Key to Industrialisation
As a strategic metal, Aluminium will continue to play a crucial role as India goes through a phase of further industrialization. Being a corrosion-resistant & electrically conductive metal impermeable to air, water, ultraviolet, and microorganisms and particularly strong, it is ideal for many uses.
It’s essential role in shipbuilding and railways has been noted since the end of the 19th century. In the future, Aluminium is set to find use in a wide range of areas, from new-age EVs to manufacturing equipment for the defense and security of our nation. As the role of Aluminium in improving industrial performance marks its literal presence everywhere in our everyday life through cutting-edge solutions, it has managed to power the industry through its use in the design of futuristic products for every sector.
Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.