As India charts its course toward becoming a $30 trillion economy, achieving net-zero emissions, and asserting global manufacturing leadership, one industry stands out as a silent yet powerful enabler—aluminium.
Far from being just a supplier of metal, the aluminium industry is a strategic asset. It fuels sectors critical to national development—clean energy, electric mobility, infrastructure, aerospace, and defence. The government of India’s Aluminium Vision Document rightly identifies aluminium as the metal of the future, essential for India’s energy independence, sustainability goals, and global competitiveness.
The roadmap to Atmanirbharta
To transform India into a global aluminium hub, the roadmap is clear: achieve self-sufficiency in raw materials, incentivize domestic manufacturing, develop robust domestic scrap collection system, and impose guardrails to protect the domestic aluminium industry.
Doing so will help meet projected surge in domestic demand and also enable India to capture 10 per cent of the global aluminium market by 2047.
Global trends & protectionism
While global demand remains stagnant, India’s domestic consumption is growing at a CAGR of 10 per cent. Yet, instead of leveraging this opportunity, we are importing aluminium—undermining domestic manufacturers.
Other nations are protecting their industries through tariff and non-tariff barriers. The US tariffs, EU’s Carbon Border Adjustment Mechanism (CBAM), and quality restrictions by Malaysia and China are clear examples. India must respond with similar measures. The industry has been asking for:
- An increase in basic customs duty (BCD) to 15 per cent under Chapter 76
- Exclusion of aluminium from all free trade agreements (FTA)
- Imposition of quality standards for scrap imports (minimum 90 per cent aluminium content)
Free market access without safeguards is discouraging domestic investment and weakening India’s industrial base.
Demand surge & investment needs
India’s aluminium demand is set to increase sixfold by 2047, from 4.5 million tonnes per annum (MTPA) to nearly 37 MTPA. Meeting this demand entails new investments worth ₹20 lakh crore for the strategic expansion of domestic production capacity. However, timely policy interventions to incentivize private sector participation remains key.
If India fails to act, it risks becoming a net importer of aluminium. Alarmingly, aluminium imports have already surged from ₹30,000 crore in FY21 to over ₹70,000 crore in FY25—a trend that threatens domestic industry and economic self-reliance.
Unlocking untapped potential
The aluminium industry is not only vital to the economy—it is a lifeline for over 800,000 livelihoods and supports 4,000 small and medium enterprises (SMEs). Its multiplier effect on employment and entrepreneurship makes it a cornerstone of inclusive growth.
India is the second-largest aluminium producer globally, yet contributes only 6 per cent to global output. This highlights the massive untapped potential of the sector. When effectively leveraged, aluminium can drive socio-economic development even in remote regions where primary and downstream players are located, generate 3.7x indirect employment for every direct job, and strengthen India’s position in global value chains.
The time to act is now
Aluminium is not just a metal—it is a strategic lever for India’s economic, environmental, and industrial future. The last major investment in the sector was in FY2016, which helped double capacity from 2 MTPA to 4.2 MTPA. To meet the projected demand of 12 MTPA by 2030 and 37 MTPA by 2047, new investments must be mobilized immediately.
If the domestic industry is expected to invest ₹20 lakh crore to meet projected demand, it must also be given assurance that its investments will be protected against geopolitical vagaries. Just as the government has taken steps to protect domestic steel manufacturers, similar measures are imperative for the long-term sustainability of the domestic aluminium industry. To recap: an increase in the basic customs duty on aluminium to 15 per cent, exclusion of aluminium from all FTAs, and ensuring at least 90 per cent aluminium content in scrap imports are some of the steps that need to be taken immediately. The time for bold action is now.
The author is director of Sustainable Outcomes Pvt. Ltd, which specialises in policy and programme consulting.
Published on September 28, 2025