The Aluminium Association of India (AAI), the apex body representing the Indian aluminium industry, has called on the government to extend the Remission of Duties or Taxes on Export Products (RoDTEP) Scheme for aluminium-producing units located within Advance Authorisation (AA) holders, Export Oriented Units (EOUs), and Special Economic Zones (SEZs).
In a letter to Finance Minister Nirmala Sitharaman, the AAI highlighted that export-oriented aluminium-producing units currently face a high incidence of both Central and State taxes, which can account for up to 10 per cent of their production costs. Without an extension of the RoDTEP scheme, the global competitiveness of Indian aluminium exports could be at risk, the association stated.
The government had previously announced RoDTEP rates for aluminium smelters in AA/EOU/SEZ units in March 2024, with an extension granted in September 2024. However, the scheme is now set to expire in February 2025, prompting the AAI to push for an extension beyond this date.
India is the second largest aluminium producer globally, with investments exceeding $20 billion in expanding domestic capacity, resulting in an annual capacity of 4.1 million tonnes. Nearly 45 per cent of the country’s aluminium exports originate from AA/EOU/SEZ-based units, demonstrating the importance of these entities in the industry.
While these aluminium producers were previously covered under the RoDTEP scheme, their inclusion lapsed in February this year. The AAI emphasized the necessity of extending the applicability of the scheme for exports from aluminium producers located in AA/EOU/SEZ units, especially in light of global trade uncertainties. Failure to do so could leave Indian industries vulnerable to the impacts of global trade fluctuations, potentially leading to production cuts, job losses, and hindered domestic growth.
As the government works towards enhancing Indian manufacturing through various initiatives, maintaining a level playing field by continuing the RoDTEP scheme will enhance India’s export competitiveness and incentivize manufacturers to invest in further value addition within the domestic aluminium industry.
