New Delhi: In a bid to protect local aluminium producers from cheaper imports, the government on Monday proposed raising the basic customs duty on the metal by 2.5 per cent. Presenting the budget, the finance minister said basic customs duty is being increased on primary aluminium from 5 per cent to 7.5 per cent and that on aluminium products from 7.5 per cent to 10 per cent.
“It is mixed bag for metal and mining companies in the budget. Higher import duty would help to some extent in curbing rising imports but increase has fallen short of industry expectaion of 10 per cent,” Abhijit Pati, chief executive officer, Vedanta Aluminium told Financial Chronicle.
In the face of low-priced aluminium from foreign countries, local producers have been finding it difficult to stay competitive and slipped into losses. Vedanta Resources in August last year had initiated the process to shut down its one-million tonne a year alumina refinery at Lanjigarh in Odisha.
The Budget addressed concerns of the iron ore producers by completely exempting from export duty on low-grade iron ore fine (current 10 per cent) and lumps (30 per cent) with less than 58 per cent iron content.
The move will largely benefit Goan iron ore producers that faced shutdown due to low demand in prime export market of China and court imposed restrictions on production due to allegations of illegal mining.
“The current situation of weak ore prices combined with high taxes is making mining operations unviable. The duty relief would help the industry somewhat," industry body Goa Mineral Ore Export Association president Shivanand V Salgaocar said.
The budget also withdrew export duty on chromium ores and concentrates (earlier 30 per cent) and cut the duty on bauxite from 20 to 15 per cent.
