See Full Document Text
r
This document has been developed with the objective of providing a
e strategic framework for the long-term growth of the sector and is intended
to serve as an indicative reference for stakeholders across the entire value
chain, including upstream, downstream and recycling. This document does
m not constitute and shouldn’t be construed to be an opinion or report or
policy covering any legal or regulatory advice or procedures to detect fraud
or illegal acts. The information provided in this document is being disclosed
on an ‘as is where is’ basis. The Ministry of Mines, Government of India
makes no representation whatsoever, express, implicit or otherwise,
i
regarding the accuracy, adequacy, correctness, reliability and/or
a completeness of the same as the document mainly relies upon the data
provided by consultant, Aluminium industry players and other
stakeholders.
l
To the fullest extent permitted by applicable law, the Ministry of Mines
c hereby expressly disclaim any and all liability or responsibility to any party
whatsoever in respect of this report, and any related communications,
including any conclusions or opinions expressed herein. Neither the
s Ministry of Mines nor any of its affiliates shall be held liable for any losses,
damages, or claims arising from or in connection with the use of this report
by any recipient.
i
The sole purpose of this document is to support collaborative efforts toward
D the sustainable development of the Aluminium sector in India. All
recommendations and data presented are for informational purposes only
and subject to further validation and stakeholder inputs. Nothing contained
herein shall constitute grounds for any action by recipients of this document
before any writ court or other judicial or quasi-judicial forum.
Vision Document on Aluminium Metal for India 2Vision Document on Aluminium Metal for India 3Vision Document on Aluminium Metal for India 4Vision Document on Aluminium Metal for India 5Vision Document on Aluminium Metal for India 6Contents
1 Executive Summary 18
2 Overview of Aluminium Industry 35
2.1 Aluminium as a Metal 35
2.2 Historical Perspective 35
2.3 Value Chain and Industry Structure, 39
2.4 Importance as a Strategic Sector 41
3 Present Scenario of Global Aluminium Industry 44
3.1 Per-capita Consumption In India & Global,, 44
3.2 Current Scenario on Aluminium Production and Trade 46
3.3 Raw Material Scenario,, 51
3.4 Downstream Products 55
3.5 Demand Analysis: Growth Drivers and Consumption Pattern across Downstream Product Segment, Key
Sectors and Regions 59
4 Aluminium and India 66
4.1 Current Scenario on Aluminium Demand, Production, Export and Import 66
4.2 Raw Material Scenario – Alumina and Bauxite: Capacity, Production, Export and Import, 70
4.3 Overview of Major Players: Current Capacity and Production 75
4.4 Downstream and Value-Added Products 80
4.5 Aluminium Cost of Production Assessment 86
4.6 Primary vs Secondary Aluminium – Present Scenario, 87
5 Net-Zero Pathway for India’s Aluminium Sector 91
5.1 Sustainability: Global Initiatives and India's Commitments Towards Climate Change 91
5.2 CCUS in Aluminium Sector 97
5.3 Green Aluminium: The Sustainable Metal-Key Trends 97
5.4 Enabling the Circular Economy with Aluminium,, 99
5.5 Comparison of India as against global Aluminium recycling rates 101
6 Demand Forecast 2030 and 2047 104
6.1 Megatrends likely to Affect Aluminium Industry 104
6.2 Growth Drivers and Demand Forecast for Domestic Aluminium Consumption in Short Term (FY30) and Long
Term (FY47) 110
6.3 Supply Forecast in Short Term (2030) and Long Term (2047) 118
7 Opportunities and Threats 125
7.1 Opportunities and Future Growth Prospects for Indian Aluminium Industry 125
7.2 Major Issues Faced by Indian Aluminium Industry 126
8 Policies and Regulations 140
8.1 Existing Policies: World vs India 140
8.2 India – Need to Emulate the Global Growth Blueprint 145
9 Aluminium Sector Vision 147
9.1 Overall Strategic Objectives 148
9.2 Functional Objectives 149
Vision Document on Aluminium Metal for India 79.3 Key enablers 150
9.4 Recommended Institutions and Taskforces 171
Annexures 177
Annexure 1: HS Code 177
Annexure 2: Technological Advancements across Aluminium Value Chain 178
Annexure 3: Initiatives Taken by the Global and Domestic Producers for Decarbonization of Aluminium Secto 182
Annexure 4: Data Tables 189
Annexure 5: Sector wise Growth Drivers 193
Annexure 6: Key Regulatory Change Requirement 204
Annexure 7: Stakeholder Views 207
Annexure 8: Comparison of Emission Norms 209
Vision Document on Aluminium Metal for India 8List of Figures
Figure 1: Forecast of India's domestic Aluminium metal consumption ............................................................................ 19
Figure 2: Forecast of India's Aluminium metal consumption and export – potential capacity .......................................... 20
Figure 3: Demand-Supply gap in Aluminium capacity by FY30 (in MT)........................................................................... 20
Figure 4: Demand-Supply gap in Aluminium Capacity by FY47 (in MT) .......................................................................... 22
Figure 5:Top 10 Elements in the Earth’s Crust ................................................................................................................ 35
Figure 6: Historic trend of the real and nominal price in USD of a metric ton of apparent consumption of Aluminium .... 36
Figure 7: Share of Developed & BRIC Economies in Global Primary Aluminium Production .......................................... 37
Figure 8: Aluminium Value Chain .................................................................................................................................... 40
Figure 9: Bauxite to Aluminium: Top five – across the chain, 2023 ................................................................................. 41
Figure 10: Country wise Per Capita Aluminium Consumption, 2022 ............................................................................... 44
Figure 11: Global Primary Aluminium Production, 2001-2023 (MT) ................................................................................ 47
Figure 12: Global Primary Aluminium Production Distribution Change, 2001 and 2023 .................................................. 47
Figure 13: Global Secondary Aluminium Production Distribution Change, 2001 and 2021 ............................................. 47
Figure 14: Global Primary Aluminium Production 2023 (MT) .......................................................................................... 48
Figure 15: Top 10 Primary Aluminium Producers, 2022 (MT) ......................................................................................... 48
Figure 16: Secondary Aluminium Production .................................................................................................................. 49
Figure 17: Product wise Trade of Aluminium Products by Value, 2023 ........................................................................... 50
Figure 18: Global Trade of Unwrought Aluminium by Volume, 2023 ............................................................................... 50
Figure 19: Global Bauxite Reserves Distribution, 2023 (BnT) ......................................................................................... 51
Figure 20: Global Bauxite and Alumina Production, 2001-2023 (MT) ............................................................................. 52
Figure 21: Global Bauxite Production Distribution Change, 2001 and 2023 .................................................................... 52
Figure 22: Global Alumina Production Distribution Change, 2001 and 2023 ................................................................... 52
Figure 23: Global Bauxite and Alumina Consumption Trend for Primary Aluminium Production, 2012 - 2023 (MT) ....... 53
Figure 24: Global Trade of Bauxite by Volume, 2023 ...................................................................................................... 53
Figure 25: Global Trade of Alumina by Volume, 2023 ..................................................................................................... 54
Figure 26: Global Old and New Scrap Generation Trend, 2001-2021 (MT) .................................................................... 54
Figure 27: Global Trade of Aluminium Scrap by Volume, 2023 ....................................................................................... 55
Figure 28: Global Aluminium Downstream Products Consumption (MT)......................................................................... 56
Figure 29: Sector wise Consumption of Aluminium Downstream Products, 2023 ........................................................... 56
Figure 30: Global Trade of Aluminium Downstream Products by Volume, 2023 ............................................................. 57
Figure 31: Global Metal Consumption, 2023 (MT),,, ......................................................................................................... 59
Figure 32: Product wise Aluminium Consumption (MT) ................................................................................................... 61
Figure 33: Product wise Aluminium Consumption Growth CAGR (2005 – 2023), (%) ................................................... 61
Figure 34: Sectoral share of Global Aluminium demand (2020) ...................................................................................... 62
Figure 35: Sector wise Consumption forecast on Aluminium (2020 vs 2030) .................................................................. 62
Figure 36: China’s Aluminium Demand, Million Tonnes, 2020 Vs 2030 .......................................................................... 63
Figure 37: Asia ex-China’s Aluminium Demand, Million Tonnes, 2020 Vs 2030 ............................................................. 63
Figure 38: Europe’s Aluminium Demand, Million Tonnes, 2020 Vs 2030 ........................................................................ 64
Figure 39: North America’s Aluminium Demand, Million Tonnes, 2020 Vs 2030 ............................................................. 64
Figure 40: India's production of primary Aluminium and consumption of Aluminium (MT) .............................................. 66
Figure 41: India’s Secondary Aluminium Consumption Trend (MT) ................................................................................ 67
Figure 42: India’s Trade of Aluminium and Articles Thereof, MT (HS Code:76) .............................................................. 67
Figure 43: India's import of primary and downstream Aluminium (MT) ............................................................................ 68
Figure 44: Share of imports of Aluminium in domestic consumption ............................................................................... 69
Figure 45: Sectoral Share in India’s Export of Aluminium and its products (MT) ............................................................. 69
Figure 46: India’s Trade of Unwrought Aluminium, 2023 (HS Code: 7601) ..................................................................... 70
Figure 47: Bauxite Resource Distribution in India ............................................................................................................ 71
Figure 48: State wise Bauxite Resource and Reserve Distribution as on 01.04.2020 ..................................................... 71
Figure 49: Grade wise Bauxite Reserve and Resource distribution, on 01.04.2020 ........................................................ 72
Figure 50: State Wise Bauxite Production (MT) .............................................................................................................. 72
Figure 51: India’s Bauxite Trade (HS Code: 260600) (MT) ............................................................................................. 73
Figure 52: Alumina Production in India (MT) ................................................................................................................... 73
Figure 53: India's Trade of Alumina (MT) (HS Code: 281820)......................................................................................... 74
Figure 54: India’s Alumina Trade, 2023 (HS Code: 281820) ........................................................................................... 74
Figure 55: India’s Trade of Aluminium Scraps, 2023 (HS Code: 7602) ........................................................................... 75
Figure 56: Indian Companies’ Alumina Capacity and Production, FY24 (MT) ................................................................. 75
Figure 57: Indian Companies’ Primary Aluminium Capacity and Production, FY24 (MT) ................................................ 75
Figure 58: Primary Aluminium capacity and production in India (MTPA) ......................................................................... 76
Vision Document on Aluminium Metal for India 9Figure 59: Capacity distribution of Secondary Aluminium based on Players (for FY 21) ................................................. 79
Figure 60: Region wise distribution of installed secondary capacity in India ................................................................... 79
Figure 61: India’s Production of Downstream Products (MT) .......................................................................................... 80
Figure 62: India’s Consumption of Downstream Products (MT) ...................................................................................... 81
Figure 63: Sector wise Consumption of Aluminium Downstream Products, FY21 .......................................................... 81
Figure 64: India’s Trade of Aluminium Downstream Products (HS Code: 7603 to 7616) ................................................ 85
Figure 65: India’s Product wise Imports of Downstream Aluminium (kT), 2023 ............................................................... 85
Figure 66: India’s Product wise Exports of Downstream Aluminium (kT), 2023 .............................................................. 85
Figure 67: Cost of Production of Aluminium (USD/T): India vs. Other Countries/Regions............................................... 86
Figure 68: Primary and Secondary Aluminium share in domestic Aluminium consumption ............................................ 88
Figure 69: Primary Aluminium Usage Distribution across end-use Sectors..................................................................... 88
Figure 70: Secondary Aluminium Usage Distribution across end-use Sectors ................................................................ 88
Figure 71: Sector Wise Green House Gas Emissions Worldwide (2021) ........................................................................ 93
Figure 72: Contribution of Aluminium in greenhouse gas emissions worldwide .............................................................. 93
Figure 73: Sector wise greenhouse emissions in India ................................................................................................... 94
Figure 74: Greenhouse gas emission intensity in the Aluminium sector (worldwide) ...................................................... 94
Figure 75: Future projections of greenhouse emissions in the Aluminium sector ............................................................ 95
Figure 76: Emission mitigation pathway for Alumina refining and Aluminium smelting (tonnes of 𝐶𝑂2/tonne of
Aluminium) ...................................................................................................................................................................... 96
Figure 77: World and India Population and Urban Population (%) ................................................................................ 104
Figure 78: World and India Electricity Generation Estimates (TWh) .............................................................................. 106
Figure 79: Per capita Aluminium consumption forecast................................................................................................. 114
Figure 80: Domestic Aluminium consumption forecast .................................................................................................. 114
Figure 81: Aluminium demand growth by sectors (MT) ................................................................................................. 115
Figure 82: Global Aluminium Trade Scenario, 2023 (Volume wise) .............................................................................. 118
Figure 83: Global Aluminium Trade Scenario, 2023 (Value Wise) ................................................................................ 119
Figure 84: Forecast of India's Aluminium metal consumption and export ...................................................................... 120
Figure 85: Demand-Supply gap in Aluminium capacity by FY30 (in MT) ...................................................................... 122
Figure 86: Demand-Supply gap in Domestic Aluminium in FY47 (in MT) ...................................................................... 122
Figure 87: Market share of scrap import in India's Aluminium consumption .................................................................. 127
Figure 88: India's primary Aluminium import in kT ......................................................................................................... 133
Figure 89: Rising import of downstream Aluminium products in India (MT)................................................................... 134
Figure 90: Potential Aluminium clusters for R&D facility development .......................................................................... 170
Figure 91: India's packaging market by type ................................................................................................................. 193
Figure 92: EV Stock forecast in India (Lakhs) ............................................................................................................... 197
Vision Document on Aluminium Metal for India 10List of Tables
Table 1: Source of incremental demand .......................................................................................................................... 18
Table 2: Projection of India's Scrap demand ................................................................................................................... 21
Table 3: Taskforces Needed ........................................................................................................................................... 32
Table 4: Application of Aluminium in different end-use sectors ....................................................................................... 40
Table 5: Leading Secondary Aluminium players in India ................................................................................................. 79
Table 6: Application of different Aluminium Alloy ............................................................................................................. 82
Table 7: Major Aluminium Downstream Producers in India ............................................................................................. 82
Table 8: Major Aluminium Downstream Producers Capacity ........................................................................................... 83
Table 9: World's Largest Economies Ranking ............................................................................................................... 110
Table 10: GDP Growth Projection by Different Agencies .............................................................................................. 111
Table 11: Sector-wise growth drivers ............................................................................................................................ 116
Table 12: Projection of India's Scrap demand ............................................................................................................... 121
Table 13: Impact of taxes/ duties/ cess on Primary Aluminium production cost ............................................................ 127
Table 14: Royalty and Taxes as percentage of ex-mine coal cost ................................................................................ 129
Table 15: Royalties and Taxes on Bauxite .................................................................................................................... 130
Table 16: Present Basic Custom Duty (BCD) of Critical raw materials required for Aluminium production ................... 130
Table 17: Major Imports from Malaysia, Indonesia and Thailand .................................................................................. 135
Table 18: Current Basic Custom Duty on Aluminium articles ........................................................................................ 135
Table 19: Focus Product Segments for Development of Downstream sectors .............................................................. 164
Table 20: Focus Downstream Aluminium Products ....................................................................................................... 164
Table 21: Sector wise interventions for promoting Aluminium usage ............................................................................ 167
Table 22: Global Primary Aluminium Production Distribution Change, 2001 and 2023 ................................................. 189
Table 23: Global Secondary Aluminium Production Distribution Change, 2001 and 2021 ............................................ 189
Table 24: Product wise Trade of Aluminium Products by Value, 2023 .......................................................................... 189
Table 25: Global Trade of Unwrought Aluminium by Volume, 2023 .............................................................................. 190
Table 26: Global Bauxite and Alumina Production Distribution Change, 2001 and 2023 .............................................. 190
Table 27: Global Trade of Bauxite by Volume, 2023 ..................................................................................................... 190
Table 28: Global Trade of Alumina by Volume, 2023 .................................................................................................... 191
Table 29: Global Trade of Scrap by Volume, 2023 ........................................................................................................ 191
Table 30: India’s Trade of Alumina by Volume, 2023 .................................................................................................... 191
Table 31: India’s Trade of Scrap by Volume, 2023 ........................................................................................................ 192
Table 32: India’s Trade of Unwrought Aluminium by Volume, 2023 .............................................................................. 192
Table 33: Indian automobile industry: production trends (‘000 units) ............................................................................ 195
Vision Document on Aluminium Metal for India 11List of Acronyms
AAI Aluminium Association of India
AAPL Angul Aluminium Park Private Ltd
ABCAI Aluminium Beverages Can Association of India
AD Antidumping Duty
AHSS Advanced High-Strength Steel
AIM Aluminium Import Monitoring and Analysis
ALCAN Aluminium Company of Canada
APS Announced Pledges Scenario
A/S Ratio Alumina to Silica Ratio
ASEAN Association of Southeast Asian Nations
BAU Business As Usual
BCD Basic Custom Duty
BIMSTEC Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation
Bn Billion
BnT Billion Tonnes
BPNSI Biju Patnaik National Steel Institute
BRIC Brazil, Russia, India, and China
CAGR Compound Annual Growth Rate
CAPEX Capital Expenditure
CBAM Carbon Border Adjustment Mechanism
CCD Circumscribing Circle Diameter
CCUS Carbon Capture Utilization and Storage
CEA Central Electricity Authority
CEEW Council on Energy, Environment and Water
CII Confederation of Indian Industry
CIL Coal India Limited
Vision Document on Aluminium Metal for India 12CIS Capital Investment Subsidy
Ckm Circuit Kilometers
CMPDI Central Mine Planning & Design Institute Limited
COP Cost of Production
CPP Captive Power Plants
CPSE Central Public Sector Enterprises
CSD Carbonated Soft Drinks
CSIRO Council of Scientific and Industrial Research
CSS Cross Subsidy Surcharges
CVD Countervailing Duty
CVs Commercial Vehicles
DFC Dedicated Freight Corridor
DGCIS Directorate General of Commercial Intelligence and Statistics
DGFT Directorate General of Foreign Trade
DISCOM Distribution Companies
DMF District Mineral Foundation
DMG Department of Mines and Geology
DRI Direct Reduced Iron
EC Environmental Clearance
EEB Energy Efficiency Benchmark
EEPC Engineering Export Promotion Council of India
EGA Emirates Global Aluminium
EOL End of life
EOU Export-Oriented Units
EPR Extended Producer Responsibility
ERP Effective Rate of Protection
ERU Economic Research Unit
Vision Document on Aluminium Metal for India 13ETS Emissions Trading System
EU European Union
EV Electric vehicles
FAME Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India
FC Forest Clearance
FDI Foreign Direct Investment
FRP Flat Rolled Products
FTA Free Trade Agreement
FTZ Free Trade Zones
FY Fiscal Year
GCC Gulf Cooperation Council
GDP Gross Domestic Product
GHG Greenhouse Gas
GWh Gigawatt hour
HS Harmonized System
HSLA High Strength Low Alloy
ICVL International Coal Ventures Limited
IEA International Energy Agency
IMEC India-Middle East-Europe Economic Corridor
IMF International Monetary Fund
IMFL Indian Made Foreign Liquor
INSDAG Institute for Steel Development and Growth
IPP Independent power producer
ISRI Institute of Scrap Recycling Industries
ITC International Trade Centre
JNARDDC Jawaharlal Nehru Aluminium Research Development and Design Centre
JPC Joint Plant Committee
Vision Document on Aluminium Metal for India 14JV Joint venture
kT Kilo Tonnes
kTPA Kilo Tonnes Per Annum
kW Kilo watt
LED Light Emitting Diode
LME London Metal Exchange
MCF Modern Coach Factory
MCL Mahanadi Coalfields Limited
MECON Metallurgical & Engineering Consultants (India) Limited
MITI Malaysian Ministry of International Trade and Industry
MMDR Mines and Minerals (Development and Regulation) Amendment Act
Mn Million
MNRE Ministry of New and Renewable Energy
MoP Ministry of Power
MoU Memorandum of Understanding
MRAI Material Recycling Association of India
MT Million Tonnes
MTPA Million Tonnes Per Annum
MTs Megatrends
MW Mega Watt
NISST National Institute of Secondary Steel Technology
NMET National Mineral Exploration Trust
NRS Non-regulated Sector
NRTC National Research and Technology Consortium
NTPC National Thermal Power Corporation
OEM Original Equipment Manufacturer
OFB Ordnance Factory Board
Vision Document on Aluminium Metal for India 15OMC Odisha Mining Corporation Limited
PET Polyethylene Terephthalate
PLI Production Linked Incentive
PPP Purchasing Power Parity
R&D Research and Development
RIR Recycling Input Rate
RoDTEP Remission of Duties and Taxes on Exported Products
ROPP Roll-on Pilfer-proof
RPO Renewable Purchase Obligations
SCOMET Special Chemicals, Organisms, Materials, Equipment, and Technologies
SECI Solar Energy Corporation of India Limited
SEZ Special economic zone
SME Small and medium enterprise
SRTMI Steel Research & Technology Mission of India
STEPS Stated Policies Scenario
T & D Transmission and Distribution
TUFS Technology Upgradation Fund Scheme
USD United States Dollar
USGS United States Geological Survey
WEF World Economic Forum
Vision Document on Aluminium Metal for India 161. Executive Summary
Vision Document on Aluminium Metal for India 171 Executive Summary
The decision to define a vision for the Aluminium industry in India is a timely one and consistent with the call
for establishment of ‘Viksit Bharat’ by 2047. The Aluminium industry in India started in the 1930s when ALCAN
set up its first smelter in Kerala through its subsidiary INDAL. Since then, India has reached a stage where it
produces 4.16 MTPA of Primary Aluminium and 1.8 MTPA in the secondary sector. India today stands at the
cusp of a major transformation. It has moved on from being called a developing nation to the leader of the
Global South to harboring ambitions of becoming a Developed economy by 2047. There are significant
implications of this on per-capita income, quality of life and citizen-amenities, not to mention on overall GDP.
Aluminium is catalytic to the transformation we seek in the transportation, infrastructure and defence
manufacturing sector. Its importance to the new economy is captured in the points below:
• It is lightweight and its application in transportation, construction etc. can bring down India’s oil import
bill.
• It is at the core of strategic sectors like space, missile defence, aerospace and is of imperative importance
in a world full of increasing strife.
• It melts at about 660oC compared to iron’s 1538oC or silica (i.e. glass cullet) at 1700oC thereby making it
less energy-intensive to re-cycle.
• Its electrical conductivity makes it the most important ingredient for the upcoming RE grid-connectivity
projects, electric mobility etc.
The understanding of the nature of the opportunity and recognition of the global competitive landscape is
important for us to realize the potential of the Indian Aluminium industry. Much progress has been made but
the nature of transformation that is called for by ‘Viksit Bharat’ is completely of a different scale. India’s GDP
today stands at about USD 4 Trillion, seventy years since our Independence. The Government’s vision is to
take it to USD 30 Trillion1 in the next 23 years. From its inception till now, Indian per-capita Aluminium
consumption has reached about 3.5 Kg (FY24) which is significantly short of the global average of 12 Kg. To
achieve even the current global average by 2047, Indian per-capita consumption needs to grow at a CAGR
of ~6%. The CAGR will need to be even more if India hopes to touch the per-capita consumption levels of
nations like China, USA, France etc. The economic progress of India will inevitably involve more Aluminium
consumption than in the past. The incremental demand will come from the following three broad sources –
Table 1: Source of incremental demand2
Incremental Quantum
Source of Incremental Annual Demand
by FY47 (MT)
Increased population – traditional applications at historical consumption
1 – 1.5 MT
intensity (e.g. electricals, utensils etc.)
Traditional applications but at higher consumption intensity (e.g. more
airframes for India’s growing defence-aviation industry, increased 15 – 18 MT
consumption of packaged food and drinks)
New-to-India applications at global average rate of consumption (e.g. greater
4 – 6 MT
component penetration in automobiles, transport etc. by Aluminium)
The path to incremental demand will not be one strewn with roses. Cutting corners and compromising on
product quality by some producers has resulted in either the discontinuation of aluminum use in certain
products or the replacement of these domestic products with imports. For example, there is an urgent need
1 Indian economy by 2050: In pursuit to achieve the $30 trillion mark, EY-India, Aug 25, 2022, last accessed on 01-Oct-2024
2 GT Analysis
Vision Document on Aluminium Metal for India 18to enunciate standards relevant to Aluminium in building & construction or e-scooters. Otherwise, these too
will earn Aluminium a bad name3. There is always competition forthcoming from alternate material from wood
to steel to carbon composites. This can only be solved if the MSME sector is enabled to upgrade through
professional guidance and aid through research and financial support. Luckily the existing players in the
Aluminium industry have the line of sight into which of their MSME business partners are more capable than
others. Their wisdom and knowledge base should be tapped to develop key MSME players to become the
vanguard of high-quality downstream thrust.
While it will not be a one-way growth story, with competition from other materials, geo-political instability,
global growth slow-down etc., it is estimated that India’s domestic Aluminium demand will be -
• Short-term (FY24-FY30): 8.5 MT by FY30
• Medium-term (FY31-FY40): 18 MT by FY40
• Long-term (FY41-FY47): 28 MT by FY47
28
Actual consumption (MT) Forecasted consumption (MT)
18
8.5
3.4 3.9 4.5 4.9
FY 21 FY 22 FY 23 FY24 FY 30 FY 40 FY 47
Figure 1: Forecast of India's domestic Aluminium metal consumption.
India’s vision in the Aluminium sector should not be restricted to meeting just the domestic demand. Today
India is a fringe player in global Aluminium trade of 67 MT with a market share of only 3.8% whereas China
has a share of 12.6%. Key competing geographies like China, Russia, North America are partially constrained
to meet the future global demand. If India plays its hand well, it is not beyond the realm of possibility to aim
to get a 10% market share by FY47. To address this overall demand, India’s capacity should scale up to 37
MTPA by FY47.
3 Industry feedback
Vision Document on Aluminium Metal for India 1937
Actual Forecast
9.1
25
6.9
12
28.0
3.8
18.0
2.4 2.2
8.5
4.5 4.9
FY23 FY24 FY30 FY40 FY47
Domestic Consumption (MT) India's Al. Export (MT)
Figure 2: Forecast of India's Aluminium metal consumption and export – potential capacity
This translates into a CAGR of about 7% for domestic demand driven growth and a CAGR of approximately
8.3% of overall capacity growth (including capture of export market share) which has to be covered in a gallop
by the suppliers. This is in contrast to how the sector has grown in the past. Indian Aluminium sector growth
has followed a step-function with long periods of gap between successive capacity additions. In the last 10
years, the sector has been in wait-and-watch mode. With high-capacity utilization in the last 3 years and in
response to the increasing domestic demand, domestic producers have initiated expansion plans for their
alumina refineries and Aluminium smelters. NALCO, Hindalco, and Vedanta aim to increase the country’s
alumina refinery capacity by approximately 10 MT and primary Aluminium smelter capacity by around 3 MT
over the next 5 to 6 years.
4.2
Figure 3: Demand-Supply gap in Aluminium capacity by FY30 (in MT)
However, these additional capacities for primary and Secondary Aluminium producers will not suffice to meet
the projected short-term capacity requirement, leaving India with a shortfall of another ~1.6 MT of
Aluminium production capacity by FY30. Similarly, the secondary sector growth plans are not supported by
domestic scrap collection plans. To support India’s goal of self-reliance, more scrap collection should be
focused upon. These gaps will lead to potential import of Aluminium into the country. Alternatively, the
Aluminium industry will go slow in pushing market-development.
Not only in the immediate term, even in the long-run, India will have to literally move mountains to stay
‘Atmanirbhar’. To meet the projected Aluminium demand, India must ensure a robust supply chain for Bauxite
and Alumina, alongside sufficient capacity for both primary and secondary Aluminium production. Domestic
primary Aluminium production is anticipated to satisfy domestic consumption needs and significantly boost
export volumes. However, securing a steady supply of Bauxite is crucial. As per announced capacity by
Vision Document on Aluminium Metal for India 20Primary Producers, Bauxite requirement is projected to reach at least 42 MT by FY30 whereas Alumina
requirement is projected to reach 14 MT by FY30.
Also, assuming 85% Aluminium content in scrap (based on scrap import quality standard set by different
countries), as per announced Secondary Aluminium Production Capacity, India’s scrap demand will be as
follows-
Table 2: Projection of India's Scrap demand4
Announced Secondary Aluminium
Year Scrap demand (MT)
Production Capacity (MT)
FY30 3.5 4.12
Demand Supply Gap Assessment
India's current domestic self-reliant Aluminium production capacity is 4.2 MT, with secondary capacity of ~2.0
MT is largely dependent on imported scrap. With new bauxite capacity, an additional 3 MTPA of primary
Aluminium production can be added. If the rate of mining from existing bauxite reserves can be increased by
50%, another 3 MTPA of primary Aluminium can be supported. Untapped domestic bauxite resources of 4.95
BnT, if proved can support another 14 MTPA of primary Aluminium. By FY47, secondary Aluminium
production from domestic scrap is projected to reach an incremental 6 MTPA. However, to meet the projected
Aluminium production capacity requirement of 37 MTPA by FY47, there will still be a shortfall of at least
7 MTPA, the raw material for which will need to be met from international sources of bauxite or scrap or
discovering more bauxite resources within India. Depending on the assumption of a lease-period or life of
mine, this gap might even increase. In any case, the process of transitioning 4.95 BnT of resources to proven
reserves should happen on a mission-mode to ensure that the pathway to 2047 is clear. This is the biggest
chunk of opportunity on which incremental Aluminium capacity can be planned. This is shown in the next
graph.
Even the growth from 6.2 MTPA (4.2 primary and ~2.0 secondary) melting capacity to 28 MTPA of domestic
demand-justified capacity is not a foregone conclusion. There is no indication from the domestic Aluminium
sector that they are planning to put up incremental capacity of the order of magnitude of 20 - 22 MTPA basis
their current pronouncements. The Western world will not give India the Aluminium it needs because they are
already on a journey towards decarbonizing their economies. Unless India thinks up a way to work around
this current conundrum, there is a great likelihood that uncontrolled quality of Aluminium from rest of the
geographies will find their way into India or India will just stop short of achieving its potential due to supply-
side constraints. The graph below captures the massive supply-side step-up that India needs to perform.
Even with massive jumps, some part of the plan is still not baked in. Each of these demand and supply side
issues has to be addressed at the micro and macro level.
4 GT Analysis
Vision Document on Aluminium Metal for India 21*
4.2
Figure 4: Demand-Supply gap in Aluminium Capacity by FY47 (in MT)
* The existing 2 MT Secondary Steel Capacity which is currently being serviced by imported scrap is included in 6 MT.
As was mentioned earlier, domestic demand growth would be about 7% CAGR and capacity growth required,
considering export demand, would need to be about 8.3% CAGR. This is more than what Aluminium sector
has achieved in the past 50 years. Also, the long gaps between sequential capacity growth in the sector is
directly attributable to very few large-capacity players in the country. This is unlike the steel sector, which has
seen continuous capacity growth on account of multiple large capacity players, each on their own track of
capacity addition. The main reasons behind low capacity CAGR of Aluminium industry compared to steel are:
• Relatively underdeveloped end-use industry (like Aerospace manufacturing) and low penetration of
Aluminium in standard segments (like Automotive) vis-à-vis global standards
• High capex per-tonne of capacity – especially in the primary Aluminium sector compared to steel
• Difficult raw material security scenario (unlike iron ore which has multiple commercial/ merchant miners)
• Lack of clarity around evolving regulations related to energy and carbon transition around the globe and
India
The 37 MTPA capacity is not only the need of India but also an opportunity which will get frittered away if the
difficult issues impeding the growth of the sector are not addressed in a comprehensive manner. Before
delving into the nature of the challenge and its potential solutions, it might be useful to learn from the
experience of countries that have been ahead of India in the curve and are of comparative size.
Global Lessons
There are several lessons to be taken from USA’s and China’s Aluminium sector strategy. In 1980, US primary
Aluminium production peaked at 4.65 MT from about 30 smelters. By 2000, USA was down to about 23
primary Aluminium smelters. Currently USA produces less than 1 MT of primary Aluminium in about 4
operating smelters. The rest of the US production of over 4 MT comes from the secondary sector which
processes scrap. There is a limit to which scrap based secondary production can go because it is limited by
the amount of scrap generated in the first place and then collected. The main reason given by US primary
producers behind closure of the smelters has been the high cost of energy. Also, the bauxite for US refineries
was predominantly imported. Today, US meets about half of its Aluminium demand from imports. Over half
of these imports come in from Canada which enjoys low production cost due to its access to hydropower. It
is a matter of great irony because ALCAN of Canada (now part of Rio Tinto) was born out of ALCOA. Between
2018 and 2022, USA has to impose import tariffs and tariff rate quotas on Aluminium and its derivative
products to protect whatever little capacity remains in that country. US industry’s denouement shows that not
Vision Document on Aluminium Metal for India 22managing raw material availability and energy price led to a situation where the domestic production is in a
non-competitive downward spiral compared to imports5.
On the other hand, China’s Aluminium production today is overwhelmingly through the primary route. The
Chinese primary Aluminium industry grew from just 0.4 MT in the 1980s to over 40 MT in 2023. This
remarkable growth can be attributed to several factors. While the USA shifted its focus away from primary
Aluminium, China promoted its primary industry through substantial government support in terms of policies
and subsidies. In 2006, China recognized Aluminium as a “Pillar Industry,” emphasizing the government’s
significant role. Investments in infrastructure and energy projects, along with heavy investments by Chinese
companies in modernizing production facilities and adopting advanced technologies, increased efficiency and
output, making Chinese Aluminium more competitive globally. By focusing on large-scale production, China
reduced costs and increased production capacity, allowing its companies to dominate the global market.
Additionally, many Chinese Aluminium producers integrated their operations vertically, controlling everything
from bauxite mining to Aluminium smelting and processing, which streamlined operations and reduced costs.
Since the coal-based power costs in China are also high, they have continuously sought newer manufacturing
and digital technologies to reduce the per-ton power consumption. Today when the world looks to become
greener, China has accumulated sufficient scrap-worthy Aluminium in its economy which it can use to sustain
a shift to secondary route. Still China looks to stay invested in primary Aluminium. All it now needs to do is to
retain relevant tax proposals that keeps its Aluminium scrap in the country. China is a good example of a
timely and well-thought-through capacity expansion story that will sustain its leadership position in Aluminium
for years to come6.
It can be seen from the debacle of the US Aluminium industry (more in historical context section) how its
dependence on scrap based secondary Aluminium and imported bauxite led to a downward spiral. Reliance
on scrap can reduce carbon footprint but it puts a limit on production. There is no way any country can produce
Aluminium beyond the quantum of scrap available, which itself is less than the quantum of production done
previously. This is a vicious cycle. There are only three ways of expanding production:
• Promoting primary Aluminium with domestic resources with progressively increased availability of these
resources over time
• Modernizing scrap tracing, collection and re-cycling domestically, popularizing and expanding closed-
loop scrap-based production method with progressively greater collection each year
• Mobilize scrap from beyond India – either as unprocessed scrap or as remelt ingots and secure domestic
supply chains. It should be easier to pull off than getting green-field mines off the ground in foreign
geographies as is being attempted now by several players including government companies. However,
the modus operandi for such action should predominantly be private in nature to ensure agility. Support
from government may be conceptualized for metal content brought back into India through such
registered entities.
Way Forward for Indian Aluminium Sector: Its Strategic Objectives
India cannot emulate China’s strategy now. When China grew, fossil fuels were not anathema to regulators,
activists and shareholders. As India stands at the cusp of a take-off, it is saddled with this additional burden
of carbon-footprint minimization. While NALCO is predominantly owned by Government of India, the other
two large players are of an international nature. Global shareholders may prevent those companies from
investing in coal-based capacities going forward. India should have more players in the large-capacity
segment (> 500 kt) by 2047, if not by 2035. USA had about 14 companies producing ~4.5 MTPA of primary
Aluminium in 1980s7. China had more than 30 primary Aluminium players in 20168. India on the other hand
has only 3 primary producers. With more players, India will not only have a louder voice in policy framing for
the country and globally but also foster a competitive market. India will also be able to fire on multiple cylinders
5 https://crsreports.congress.gov/product/pdf/R/R47294#
6 The-Development-of-Aluminium-Industry-and-Technology-in-China-1.pdf (international-Aluminium.org)
7 U.S. Congress, Office of Technology Assessment, Nonferrous Metals: Industry Structure - Background Paper, OTA-BP-E-62
(Washington, d: U.S. Government Printing office, September 1990).
8 Gao, B., Wang, Z., Shi, Z., & Hu, X. (2017, October). History and Recent Developments in Aluminum Smelting in China. In Travaux
46, Proceedings of 35th International ICSOBA Conference (pp. 2-5).
Vision Document on Aluminium Metal for India 23and hustle their way around the global economy. More players with predominantly Indian shareholders may
also have greater leeway with regard to fossil-fuel based capacities than current incumbents. However new
players will only come in if India can solve for their line-of-sight to raw material and energy security.
In this scenario, India should focus on its innate advantages and follow the path described by our Hon’ble
Prime Minister. Accordingly, its Vision and Mission may be articulated and worked upon by all the players in
the sector. The demand and supply will not be achieved automatically. It has to be actively guided through
policies and other enablement. The sector’s vision and mission should be facilitated by the ministry and
established in the following suggested tenets:
Key Tenets of Vision Elements
Viksit Bharat • Aluminium sector (led by the Ministry) should work on increasing per-capita
consumption in India through introduction of newer applications and
evangelizing these with potential customer segments.
• Indian Aluminium sector should leverage India’s standing as a leader of
the Global South and ‘Design for the World’ to solve global problems.
Through this, India’s Aluminium end-use product export footprint can be
expanded
India’s vision should be to develop a self-reliant Aluminium industry that stands as a competitive and
sustainable global leader. To achieve this, India’s mission should be to promote the Aluminium
industry for a sustainable future through eco-friendly practices.
Key Tenets of Mission Elements
Atmanirbharta Self-reliance in terms of resources to achieve the vision (for both primary and
secondary sector)
Ease of Living Contribute to a better environment through constant efforts to reduce carbon
footprint
4 Strategic Pillars of India’s Aluminium Vision
Core Strategic Objectives Sub-objectives
Strengthening Domestic • Increase domestic production capacity to meet
Aluminium Industry to 100% of domestic demand by 2047
Become ‘Atmanirbhar’
• Drive domestic demand generation for new &
existing applications
• Ensure 100% of India’s bauxite and alumina
Self-Sufficiency in Raw
requirements are met domestically by 2035
Material for Aluminium
• Ensure at least 50% of scrap requirements are
Production
met domestically by 2047
• Achieve net-zero emissions in the Aluminium
sector, with a 30% reduction in GHG emissions
Achieve Carbon Neutrality in
by 2030 compared to the 2023 baseline
Aluminium Production
• Increasing the share of RE to 70% of the total
energy used by 2047
Vision Document on Aluminium Metal for India 24• Target achieving a 56% End-of-Life Recycling
Rate for Aluminium by 2047, matching the
current global standard
• Maximize the conversion of its primary
Aluminium production into value-
added/downstream products by 2035 and
Focus on Value Addition and maximize its export composition towards
Export growth downstream products by 2047
• Increase India’s share in the global Aluminium
market volume from 3.8% in 2023 to 10% by
2047
Combining the themes of ‘Viksit Bharat’, ‘Atmanirbharta’, ‘Ease of Living’ mentioned by the Hon’ble PM in his
vision, the following inferences may be drawn that are of relevance to the Aluminium sector –
• Countries like US who have relied on scrap and imported resources for Aluminium production have
suffered compared to those countries that have managed their access to input materials for primary
Aluminium like China. It is always advisable to leverage domestic resources to the maximum extent
and also have its strategy to retain economical access to global raw materials.
• India’s Aluminium sector growth should be based on clean energy to the extent possible. The lack of
economical solutions that are simultaneously green is a cause of hesitation for Aluminium companies.
Challenges of technical feasibility and financial viability will need to be overcome through newer
approaches like
a. Group-captive: Under the Electricity Act, a group captive framework can be created when
participants can invest 26% equity in all and consume at least 51% of the power produced. NTPC
and MCL have presence in the Aluminium and steel belt of Odisha. Additionally, MCL (or other CIL
subsidiaries) have a RE footprint under implementation and also PSP potential which can provide
RTC power. This combination of bundled power – both brown and green where bulk of the funding
is done by MCL (which should be concerned about its future coal demand) and remaining being
shared by the power consumers can be a good way for Aluminium producers to avoid investment in
coal-based capacities yet enjoy the benefits of steady power.
b. Local green-power corridor: Hindalco has planned a floating solar power plant in the Hirakud dam
reservoir. This is near its Hirakud and Aditya smelter. Such floating solar projects can be considered
at the nearest reservoirs of other smelters also; Renukoot (nearest reservoir: Rihand dam), Vedanta
(nearest reservoir: Hirakud dam) and NALCO (nearest reservoir: Rengali dam). If floating solar
projects prove feasible, then green-power transmission corridors bypassing the state transmission
network can deliver power economically to the smelters. It is also suggested to set-up a large green
energy park dedicated to Aluminium sector which can provide round the clock power to Aluminium
plant. This will boost the investment for setting up capacities for Aluminium and will help industry
reducing its carbon emission.
c. Ring-fencing green capacities for easier CBAM compliance: To service the European export
market India needs a maximum of 5 MTPA of certified green capacity around the country. The
secondary route with end-of-life scrap is relatively green. If the energy is also from a RE source,
then the Aluminium CO2 footprint would be very low. However, for easier CBAM compliance these
lines may be ring-fenced in a separate physical and logical legal entity that is separately registered,
even if these are proximate to the other lines.
d. Other Initiatives: More regulatory changes are required such as allowing green power generated
in any part of the country to be counted against RPO obligations. These are captured later in the
document.
Vision Document on Aluminium Metal for India 25• Indian per capita consumption must be increased through application evangelization and product
innovation. It has been reported for many years now that the number of applications of Aluminium in India
are a tenth of the number of its applications world-wide9. For instance, ICRA reports10 that the average
quantity of Aluminium used per vehicle in India remains significantly lower (around 40-45kg) compared
to the global average of roughly 160-200 kg. As the number of applications increase in India, so will the
consumption of primary Aluminium. India will progressively scale the ladder of downstream value-addition
and transform into a manufacturer of finished end-use products of Aluminium. With increased product
innovation, India can channelize its developed design talent to solve the problems of the world. For this
an INSDAG kind of organization that works in the steel sector, would be recommended for the
sector for expanding use of Aluminium applications in India.
• MSMEs that are within the ambit of DPIIT are critical to the success of application development. Yet they
do not have significant exposure to the potential opportunities. Their entrepreneurial spirit along with
some support in R&D and finance can allow them to ride on the work done by INSDAG like organizations
(for Aluminium) and create that bridge between the end-consumer and the Aluminium producers. The
large-capacity Aluminium producers can play an important role in catapulting their MSME business
partners into a higher orbit by introducing them to Private Equity funds and other professional agencies
that can strengthen their governance and enable them to grow bigger.
• In his Independence Day speech of 202411 from the ramparts of the Red Fort, our Hon’ble Prime Minister
mentioned a few points of relevance. Some of the new messages one could distill are ‘Design in India,
Design for the World’, ‘State-level Investment Competition’ and ‘Indian Standards as Global Benchmarks’.
The Hon’ble Prime Minister called upon Indians to strive to be the skill and manufacturing hub of the world
during his 78th Independence Day speech on 15th August 2024. Clearly this will contribute to India’s GDP
and upliftment of its people. In keeping with the call by the Hon’ble PM, the Aluminium sector should
participate in India’s export ambition and meet a reasonable proportion of the global demand of Aluminium
products. It can be hoped that India will transform itself into an exporter of end-use products made out of
Aluminium rather than a predominant exporter of upstream and semi-finished products. It should be
realized that accessing export markets in the future may need Indian manufacturers to enhance their
quality and carbon-emission standards to an extent where they can navigate through potential non-tariff
barriers. A taskforce under the relevant ministry to work on establishing standards for various
Aluminium products and input materials is the need of the hour.
• The resources required to maximize India’s per-capita consumption and also participate reasonably in
the global marketplace for end-use Aluminium products, should be controlled and easily accessible to the
sector. Today access to resources is not easy. New entrants in the sector do not have access to large
Bauxite deposits. Even if the Bauxite issue is resolved the Coal issue remains. To resolve bauxite block
paucity, regulations need to be changed to enable
a. Combined auction of multiple leases as a single block: Regulations should be changed to allow
non-contiguous leases to be auctioned as a single block so that a refinery of suitable size can be
planned against this. This is possible in Odisha where a lot of blocks of small size are available, but
these are individually not attractive.
b. Proving indicated resources in mission mode: There is a serious need of expediting detailed
exploration to prove indicated resources of bauxite which stands at 4.95 BnT as on date. GSI should
be given targets to expedite bauxite exploration, specially in Andhra Pradesh, Chhattisgarh and
Odisha.
c. Closed-loop domestic scrap recycling: India has accumulated significant Aluminium in its
economy over the last 50 years. A portion of this already scrapped indiscriminately in landfill. Some
9 Tomotia, S K (2002) Aluminium and Its Usage. In: Proceedings of Seminar on Resurgence of Metallic Materials the Current
Scenario(ROMM-2002), 24-25, October 2002, National Metallurgical Laboratory (CSIR), Jamshedpur.
10 Primary Aluminium Industry, ICRA, Aug 2023, last accessed on 03-Oct-2024
11 Prime Minister Shri Narendra Modi Sets Ambitious Vision for India's Future in 78th Independence Day Address, PIB Delhi, 15-Aug-
2024; last accessed on 01-Oct-2024
Vision Document on Aluminium Metal for India 26of it is in use and some of it, even though not in use, are untraceable within a bigger application that
has been surveyed off or scrapped. To make the most out of the scrap that is lying in the Indian
economy, it is important to ensure that individual applications return to the specific remelt site so
that the chemistry is preserved. Empty beverage cans should return to beverage can manufacturers
and automotive parts should return to auto-cluster Aluminium ancillaries. This calls for more
specificity in the ESR with responsibilities on the user of the product as well as greater use of
technology and GST system to maintain traceability of Aluminium parts as they diffuse into the
economy.
d. Facilitating scrap value-chain outside India: India itself has a net shortage of about 7 MTPA by
FY47 on the supply side. Even now there is a gap, which is why it is importing indifferent quality
scrap from wherever available. Increasingly the developed nations like USA and Europe may stop
scrap moving out of the country. India recognized many years back the merit of creating entities to
ensure raw material security for its mineral dependent industries. It is time now to promote Indian
companies to participate in scrap value chain outside India and bring in either unprocessed scrap
or remelted and refined ingots.
In this regard, an agency or agencies may be created/ mandated that shall set up large scale state-
of-the-art scrap segregation plants at the point of ingress to provide collective service to secondary
Aluminium / Recycling Industry to create economies of scale. Government may identify the
requirement for providing support / incentive for setting up such units in India / abroad for collection,
and segregation of Aluminium scrap which can be provided to recycler maintaining the quality of
scrap.
e. Other Initiatives like early operationalization of Coal and Bauxite blocks through ministerial
interventions should be a standard operating practice for the states; solving logistics issues in key
districts to enable movement by railway through a proper masterplan are very important initiatives.
f. Aluminium being a power intensive, even if the issue of the main raw material is solved, the issue
about allocation of rakes to the non-power sector remains in the near-term. Many nations that focus
on exporting minerals and mineral concentrates are often said to be suffering from resource curses.
In the case of Aluminium, exporting upstream products tantamount to exporting energy whereas
exporting downstream and end-use products is a proper reflection of value-addition through skill and
manufacturing prowess. Recognizing Aluminium as a core sector may enable preferential or
focused treatment of the sector in matters related to rake-allocation, anti-dumping issues
etc.
• Secondary players who are low energy and carbon footprint companies are important contributors in
India’s net-zero ambition. To remain profitable and sustain over the long run, they should look at value-
capture through forward integration into applications on the one hand as well as back-ward
integration into scrap value chain in India and abroad. Measures such as incentivising recycling plants
and liberalising financing for MSMEs may be implemented to promote domestic scrap collection, establish
recycling and downstream plants, and reduce reliance on imported scrap.
• Further, to boost downstream Aluminium production, impetus should be given to existing proposed/ new
Aluminium Parks to bring them into operation as early as possible as it would not only help in value
addition but also help in employment generation. This will require the primary Aluminium players to take
initiative for developing downstream players in and around their plant by providing land, hot metal,
amenities, and other support to such players. Efforts should be made to adequately publicise such parks
to attract investors/ MSMEs to set up value addition plants.
• Indian manufacturers should collaborate and devise a common minimum program that aims to address
the Hon’ble PM’s concerns around ‘Ease of Living’. In the Coal sector, under the call of ‘Ease of Living’
first-mile connectivity of Coal mines to rail-lines was mechanized through CHPs and silos. This was done
to reduce the environmental and traffic-hazard faced by people living in the Coal-fields due to heavy truck
movement. The primary Aluminium sector has to deal with issues such as emissions from their CPPs,
red-mud disposal, ash-pond breaches, fluoride pollution etc. causing significant strain on their managerial
Vision Document on Aluminium Metal for India 27capacity as well as posing a constant risk to people in the vicinity. It may make sense for them to
increasingly become mixed players with both primary and secondary (re-melt) production
facilities. This would be a pragmatic step given the direction being taken by the EU to impose CBAM.
There may be ways that can be found to get the upstream players to support down-stream or end-use
applications in ways more evolved than just creating industrial parks near their smelters. This will enable
incremental capacity addition in India to be in the greenest possible mode. There are other ways of
collaboration too which are discussed later in this document. Some platforms, initially developed for the
steel industry (like MSTC or mjunction) can also be leveraged to drive collaborative efforts for
Aluminium (e.g. collective buying/ import of fluoride or calcined pet-coke).
In addition to these initiatives, several other short-term actions are needed to make the industry tide over the
short-term challenges. it is expected to face in the short-term from the standpoint of trade, skills, technology
etc. These are discussed at some length in the document. Following immediate measures are required to
help the industry navigate short-term challenges-
• Skill Development: Developing skills in fabrication, precision manufacturing, and Aluminium
metallurgy through specialized courses in ITIs, polytechnics, and packaging institutes is crucial for a
robust Aluminium ecosystem. Emphasizing non-ferrous extractive metallurgy, circular economy, and
continuing collaboration with the Indian Iron and Steel Skill Council will further support this sector.
• Quality Standards: A detailed set of standards for Aluminium products is essential to prevent the
import of sub-standard items and improve the global perception of Indian downstream products.
Stricter enforcement and new standards are needed across various sectors, including packaging,
construction, and recycling, to ensure quality and performance.
• Relevant tariff items should be reviewed in FTAs in case of import from ASEAN countries and bilateral
safeguard clauses should be strengthened. Appropriate trade remedial measures should be taken
on a case-by-case basis where there is proof of dumping of Aluminium articles in Indian market.
• Coal Cess revenue to be dedicated to the development of renewable energy and clean environment
technologies.
• Aluminium industry’s Captive Power Plants (CPPs), which are notably energy-intensive, should be
relieved from the Electricity Duty
• Allowing Calcined Pet Coke (CPC) imports as per the Aluminium capacity
• Rationalizing Logistics costs of critical raw materials and wastes (Fly ash, Red mud) by reducing
railway freight in a revenue neutral manner
• NRS Linkage Auctions with sufficient offer to meet increasing demand to distribute coal in the
proportion of 75% for power and 25% for non-power sectors
• CIL should apply the latest Central Electricity Authority (CEA) norms to calculate Coal Requirement
for CPPs.
• The implicit taxes which are already being paid by Indian Aluminium industry, are required to be
recognized as effective carbon taxes
• A Production Linked Incentive Scheme can be provided for the focus product segments in the
downstream sector to reduce import dependency of products like can stock, hard alloy plates, alloy
wheels etc. and support the demand from growing sectors like marine, aerospace & defence etc. The
list of these products has been provided in chapter 9.312.
12 Industry Sources
Vision Document on Aluminium Metal for India 28• Additionally, the following sector-specific measures can be implemented to promote Aluminium
usage:
Key areas to be addressed Interventions
Building & Construction Sector
• Lack of comprehensive standards for • Creation of a National Fenestration Rating Council of
Aluminium doors, windows and facades India (NFRC India) in similar lines of USA, to create
resulting in low quality, sub-standard norms and testing standards.
product flooding the market.
• Implementing a standard for fenestration in India
• Absence of Energy ratings for doors,
• Preference for use of formwork in government
windows and roofing sheets.
building projects, affordable housing projects, smart
city projects, Pradhan Mantri Awas Yojana etc. may
be considered.
Packaging
• Pharmaceutical and packaged food • Strict compliance with BIS guidelines for Aluminium
industry prefer sourcing primary house foil / semi-rigid containers for food packaging.
Aluminium foils to avoid any
• Suitable regulations for ensuring adequate strength in
contaminations
semi-rigid containers for avoiding contamination or
• Lack of standards/ lesser compliance to spillage of food.
existing guidelines.
• A cluster-based strategy could be employed to
support foil converting MSMEs in supplying to the
pharmaceutical industry. They can be given training
on standards, technology upgradation support,
working capital solutions etc.
• Encouraging large companies to procure from foil
converting MSMEs on spot payment basis.
Transport
Railways: Capability gap for manufacturing of • Strong push for adoption of indigenous Aluminium in
large CCD (24") extrusions with length of 25 wagons, semi high-speed trains and metros.
m
Two wheelers/ Passenger Vehicles / • Strong push for light-weighing of vehicles
Commercial Vehicles
• Stricter emission norms for HDVs in line with rest of
• Weaker emission control targets and the world
enforcement
• Mandating efficiency norms for electric vehicles
• Less stringent passenger safety and (EVs), such as power consumption per ton-kilometre
control regulations
• Stricter axle-load regulations for Commercial
Vehicles like European regulations mandates
lightweighting passenger vehicles- a legal weight
restriction of 3.5 metric tons, including passengers
and cargo13.
13 Alumobility White-Paper_All-Vehicles-Should-Be-Made-From-Aluminium_July2022.pdf
Vision Document on Aluminium Metal for India 29Key areas to be addressed Interventions
• Capability developments via technology tie-ups by
domestic players specially in Brakes and Suspension
(ABS) and Crash Management Systems (CMS)
• Strong push for adoption of Aluminium in govt. buses
/ e-buses
• Driving adoption of Aluminium by OEMs in Crash
Management Systems (CMS), body structures and
EV battery housing
• Standards for driving adoption of Aluminium based
front / rear underbody protection devices in heavy
goods carrier
Electrical, Machinery & Equipment
Lack of domestic capability to manufacture • Domestic companies to develop abilities for
large Aluminium sections manufacturing large profiles (for Welding machines
up to 400 mm CCD, for UPS / Invertors up to 400 mm
CCD)
• Domestic companies should focus on enhancing their
capabilities in cold rolling and indirect pressing to
achieve improved tolerance requirements and
superior surface finishes.
How to make it happen
Many things need to fall in place before all the actions can begin, leave alone, start bearing fruit. For starters,
while primary metal is within the ambit of the Ministry of Mines, demand generation will need support from
the Ministry of Trade and Commerce. Energy will need the support of MNRE, Power, Coal etc. Even states
need to come on board for some of the solutions to fall in place.
Aluminium is a strategic mineral now for India. Maybe it was not as strategic between the World Wars till the
advent of the green age. It needs specialization as well as focus. Since Aluminium value chain straddles
multiple domains (from mining, chemicals, Industries, MSME etc.) the Ministry may want to implement
institutional reforms needed to support this transformation. The following institutions are proposed in line with
the experience of the steel sector:
• Creation of an “Investment Promotion and Aluminium Strategy Implementation Cell” (IP&ASIC) in
the Ministry led by a JS/ Senior Director Level Officer who sets timelines and monitors progress of
implementation actions – this Cell should debrief the Secretary every fortnight about progress. This cell
will
o Coordinate with primary and secondary players regularly to understand the on-ground difficulties
being faced by them in the implementation of the strategy.
o Coordinate with State Govts. / Central Institutions for timely support to industry after MoU signing.
o This cell will also Identify and take decisions on measures like reduction of GST, other duties and
taxes for Primary, Secondary and Downstream, PLI, treating CPPs at par with IPPs, Public
Procurement preference, and other incentives to promote capacity addition across value chain.
Vision Document on Aluminium Metal for India 30o The cell would organise Investment Promotion Roadshows/ Conferences/ Seminar for Aluminium
industry for increasing downstream capacity addition and attract metallurgical OEMs to setup
manufacturing base in India.
o Arrange funding for setting up of Aluminium Data collection and Publication Unit and Institute for
Aluminium Application Growth
o Coordination with all taskforces, setting milestones & timelines and monitoring progress of
implementation actions
o Policy formulation support can be provided by the Cell by deploying specialized resources.
• Looking at the experience of steel sector, the following dedicated institutions are needed for Aluminium
sector to promote collaboration, data sanctity across Aluminium value chain and application
evangelization
o Aluminium Data collection and Publication Unit (ADCPU) on the lines of Joint Plant Committee
(JPC) under the Ministry of Steel. The board members/ management committee of the entity can be
drawn from PSUs and Private sector organizations. The organization can be headed by an Executive
Secretary who can be drawn from the industry. This organization should be responsible for collating
survey based or officially collected periodic data from different agencies across value chain players
and consolidating the same for the Ministry. This unit can serve as the custodian of official data of
the Ministry. The data from primary/ secondary producers, recyclers, special groups like extruders
etc. can all be brought under one umbrella. The JPC also has an Economic Research Unit (ERU)
within itself. However, the decision to have an ERU within the ADCPU is a function of what tasks are
determined for the ERU by the IP&ASIC and whether the right team members are found to perform
such sector-oriented commercial and economic research work. Some of the residual team members
of the taskforces (described later in the document), post implementation of their mandates can also
be assimilated into the ERU. If the ERU is constituted here, then the policy formulation assistance
role of the IP&ASIC should be devolved to the ERU.
o Institute for Aluminium Application Growth (IAAG) on the lines of INSDAG under Ministry of Steel
may be set up. INSDAG is a not-for-profit, member-based organization established by the
Government of India (Ministry of Steel) and Major Steel Producers of the Country as a “Society”. It is
engaged in development of advanced and cost-effective design methodologies, technical and
institutional marketing by expanding applications of steel in different segments of the construction
industry, up-gradation of technical skills and know-how, creation of awareness amongst potential
users and communicating the benefits of steel vis-à-vis other competitive materials etc. INSDAG is
also involved actively in formulation and revision of codes and standards for steel use in construction
based on latest developments with Bureau of Indian Standards (BIS) and Indian Roads Congress
(IRC). The IAAG should aim to bring in global knowledge of innovative as well as standard
applications and work with regulators and potential buyers to create an ecosystem more receptive to
the use of Aluminium.
• The Aluminium sector in India does not have a technology advisory organization of global repute and
clientele of the nature that is enjoyed by RITES (railways) or EIL (O&G) or MECON (steel) or even
CMPDIL (coal nationally). These organizations have such heft that they can influence specifications for
projects globally. While NRTC and ABSTC own various patents in the Aluminium sector and have done
significant research work it would serve the sector well if JNARDDC should evolve into a center of
excellence to such an extent that it can earn significant part of its revenue from its research and consulting
experience. It may embark on a journey specializing in research and development and work on aiding
the development of downstream products/ end-use applications for the MSME sector through their
research capabilities.
• In addition to these institutions there is a need to create 3 taskforces to enumerate micro actions for the
sector. The deliverable of the taskforces can be program-manage by the IP&ASIC. The IP&ASIC should
draft the detailed terms of reference and tenure of the taskforces. The taskforces may include knowledge
partners to help in the collation effort. The following taskforces are envisaged:
Vision Document on Aluminium Metal for India 31Table 3: Taskforces Needed
Constitution of the Taskforce (In
Taskforce Name Primary Mandate
addition to MoM representative)
Resource Security • Chalk-out detailed action plans to Representative of NITI Aayog;
Taskforce amend various rules and laws at the Representative of DSM, Govt of
central and state level or impute Odisha; Representatives of other
tasks and duties to various relevant state DMGs;
organizations to help development Representative of AAI;
of bauxite resources and improve Representative of MSTC, MRAI
scrap collection etc.
• To dissolve on completion of their
deliverable
Applications • Develop strategic plans to promote International Aluminium marketing
Development & Aluminium usage in sectors like and sales experts; Indian
Demand Generation automotive, transport, construction, Aluminium sector marketing &
Taskforce packaging, electronics etc. sales representatives from
primary, secondary and
• To draft standards to ensure that the
downstream sectors;
quality of all Aluminium products and
Representative of EEPC/ DPIIT,
inputs (imported and domestic)
Knowledge partners etc.
meets global standards
Representative of JNARDDC,
• Decision on the product coverage
NRTC, ABSTC; Representatives of
(finished Aluminium products or
trade bodies like AAI/ ASMA/
even input materials) of Quality
MRAI etc.; SMEs as relevant
Control Order
Representative from CSIR (DML,
• Identify various research areas in
NML, IMMT etc.); Invitees from
collaboration with the Downstream
International Research
Development Taskforce, prepare
Organizations (like CSIRO);
budgets, plans for any capital lab/
Invitees from pioneering academic
pilot plant-equipment purchase etc.
institutions (IIT BHU etc.);
and work on those research topics
Representatives of Global OEMs
with MSMEs and large players.
like Fatahunter, ACT, Hycast,
• Will merge into IAAG on completion Warwick, Hencon etc.;
of the mandates
Representatives of Process
Automation & Digital players like
Siemens, ABB etc.
Green Transition • Chalk-out detailed plans to create Representative of MNRE and
Taskforce sufficient green capacity at a landed Ministry of Power (MoP);
cost that is competitive for the Representatives AAI and ASMA;
Aluminium sector Representative of World Bank/
GIZ/ JICA etc.; Representatives of
• Evaluation of RPO obligations,
CIL/ NTPC/ SECI etc.; Green
Carbon Credit purchase etc. in the
Project Developers like Greenko /
context of carbon-tax like levies
O2 etc.
• Definition of Green Aluminium
• To dissolve on completion of their
deliverable
Vision Document on Aluminium Metal for India 32Immediate high-impact initiatives:
To address the immediate requirement of Aluminium Sector, following strategic initiatives need to be adopted
at earliest:
Rationalizing the electricity duty on Aluminium CPP plants (especially in Odisha and Chhattisgarh) to
allow the Aluminium industry to be more cost-competitive globally
Considering Aluminium CPP equivalent to IPP for equal priority in the allocation of rakes
Expediting exploration and auction of larger bauxite blocks through amalgamation or auction of
multiple non-contiguous mining leases as a single block
Supporting MSME development in Aluminium clusters/parks with the help of primary Aluminium
players
Creating/mandating an agency with government support to establish large-scale, state-of-the-art scrap
segregation plants at the point of scrap ingress
Conclusion
The Executive summary captures only the key actions that are of strategic importance. There is a slew of
other initiatives needed to help the sector tide over near-term issues (like upcoming FTAs). These are
discussed in appropriate sections of the report.
Aluminium is a very strategic metal for India’s future, and it should earn its place of importance in terms of
policy making by the Government. India is blessed with all the resources that are necessary for it to take a
leap into the future. However, it would not be wise to underestimate the scale of change required or the extent
of hand-holding that would be necessary for the vision to fructify into reality.
It is a statement of fact that outside the IT sector, Indian or Indian-owned multi-national companies are visible
at large-scale only in the metals and mining sector. It is equally true that the scale of international presence
of Indian metals and mining companies, is far short of the extent of multi-national presence developed by
global metals and mining conglomerates such as Anglo American, Rio Tinto, BHP, Vale, Glencore Xstrata
etc. One of the features of metals and mining giants around the world is that they have presence across
multiple minerals. Aditya Birla Group’s Hindalco is the only Indian Aluminium multinational that operates at
scale outside India through its acquisition of Novelis and Aleris. It is important for the growth of Indian
Aluminium sector to consider such players with their global footprint as part of the Indian Aluminium sector
so that we may learn from their capabilities (such as recycling from Novelis and aerospace grade alloy-
metallurgy from Aleris). Vedanta’s Aluminium presence is limited to India but on the whole, Vedanta, at the
group level, is present across multiple minerals and geographies. Like Vedanta, NALCO’s Aluminium
presence is also limited to India, but is one of the lowest cost producers of bauxite and alumina. Both Vedanta
and NALCO are predominantly upstream players in comparison to Hindalco’s global footprint. As the world
approaches a period of strife and nationalization, the window of opportunity on multi-national corporations in
the metals and mining domain seems to be closing. Amidst this turmoil there are examples of hectic forays
by global players to control the mineral economy of the world through diversification and strategic tie-ups. We
are already seeing companies without any presence in Aluminium, express their interest in this sector in India
at this time. Indian players have found it difficult securing bauxite resources outside India vis-à-vis competition
from China. It is the aspiration of the industry that the country should have multiple India-Headquartered multi-
national resource-based companies with presence in Aluminium by 2047 who on the basis of their
entrepreneurial spirit will carve out a path for India to realize its Vision.
Vision Document on Aluminium Metal for India 332. Overview of
Aluminium Industry
Vision Document on Aluminium Metal for India 342 Overview of Aluminium Industry
2.1 Aluminium as a Metal
The earth’s crust constitutes 1% of the earth’s volume. Nearly 8% of the earth’s crust contains Aluminium and
it is the 3rd most abundant element, following oxygen and Silicon.
Titanium
Magnesium Hydrogen
Potassium 0.57%
2.33% 0.14%
2.09% Others
Sodium
0.48%
2.36%
Calcium
4.15%
Iron
5.63%
Oxygen
Aluminium Top 10 46.10%
8.23%
Elements
Aluminiumis the most
in the
abundant metal found in
the earth's crust. But, Earth's Crust
due to its reactive
nature it is usually
found in the alumino-
silicate form.
Silicon
28.20%
Figure 5:Top 10 Elements in the Earth’s Crust
In the last 60 years the consumption of Aluminium has grown more than 20-fold, making it one of the fastest
growing metals in terms of consumption14 15. Its unique properties- lightweight, recyclability, conductivity, non-
corrosiveness, and durability make it the 2nd most consumed metal in the world after steel with an annual
consumption of 97.8 MT in 2023. Due to its versatility, Aluminium is a metal of choice across different sectors
like automobiles, construction, packaging, electrical, machinery and equipment and consumer durables for
various applications.
2.2 Historical Perspective
Alum (a compound of Aluminium) was used from time immemorial. However, modern scientists were able to
isolate this metal only in 1825. It was originally considered difficult to refine and until the middle of the
Nineteenth century, its price remained higher than gold. Production of the metal grew from 6,800 tonnes in
1900 to 2.8 MT in 1954, when Aluminium surpassed copper to become the most produced non-ferrous metal.
As on date, Aluminium production exceeds those of all other non-ferrous metals combined. While total
Aluminium production in 2022 stood at 108 MT, the production of Copper, the 2nd most produced non-ferrous
metal, stood close to 26 MT.
While many scientists and engineers were instrumental in the development of this industry, engineers Paul
Heroult (later associated with Pechiney) and Charles Martin Hall (later associated with Alcoa) independently
improved the electrometallurgical process in the latter half of the nineteenth century, that industrialized the
process of extracting Aluminium from Alumina. Around that time, Carl Joseph Bayer was successful in
producing Alumina from Bauxite at scale. Aluminium prices remained high till the turn of the century. The
initial uses of Aluminium were in jewelry, optical instruments, and cookware. In the early days of the Twentieth
14 Past and Prospective Trends In The World Aluminium Industry, International Bank For Reconstruction And International
Development Association, 31-May-1968, last accessed on 04-Oct-2024
15 Industry Sources
Vision Document on Aluminium Metal for India 35century, Aluminium alloys added versatility to the physical properties and expanded the use of Aluminium in
marine and aviation sector. During the first world-war, the use of Aluminium had extended heavily into the
power sector and coinage in addition to sky-rocketing demand in airframe manufacturing. After the war prices
rationalized over time. However, demand for Aluminium remained strong in traditional houseware applications
and new applications in surface transport (like freight cars) and construction sector developed between the
two wars. At this time, Carl Wilhelm Soderberg innovated on the process of anode manufacturing that gave
a fillip to the cost of production of Aluminium.
20
18
16
e n14 US $/t 98 US$/t
n
o
t c12
irte10
m
re 8
p
$ 6
0
0
0 4
1
2
0
1900 1920 1940 1960 1980 2000 2020
Year
Figure 6: Historic trend of the real and nominal price in USD of a metric ton of apparent consumption of Aluminium
Note:
1. Unit Value (US$/t): Unit value is defined as the value of 1 metric tonne (t) of Aluminium. It is calculated using the "Annual Average
Primary Aluminium Price," in USD, as reported in the Mineral Yearbook.
2. Unit Value (98 US$/t): The Consumer Price Index conversion factor, with 1998 as the base year, is used to adjust unit value in the
current USD to unit value in constant 1998 USD.
Recycled Aluminium was considered inferior to primary Aluminium because of poor removal of dross and
other impurities. Recycling grew but remained in the shadow of primary production. As electric energy prices
declined in the West in the late 1930s, energy-intensive primary Aluminium again started dominating
recycling. However, by the time of the second-world war, recycling had taken hold. The second world war
saw Aluminium manufacturing increase heavily in Europe. After the Second world war, growth in civil aviation,
advent of the space age, high-speed rail sector and increased consumerism by baby-boomers led to a very
high CAGR of the Aluminium sector for several decades.
As the growth of global Aluminium use increased in the 1960s and the 1970s, it faced environmental scrutiny
(which among other things led to a shift in the anode making process). With the increased Aluminium
production and demand, the exchange trade for metal contracts started on the LME in 1978. Till this time
Aluminium production globally was dominated by USA, Europe (incl. USSR) and Japan. However, since the
early 1970s, there has been a geographic shift in the production of Bauxite, Alumina, and Aluminium. In
Bauxite, Guinea, Australia, Brazil, China, India and Indonesia overtook the traditional geographies of
Jamaica, Russia etc. Global Alumina production too has shifted to China, Australia, Brazil and India from
Russia, Jamaica, Suriname etc. Some analysts prefer to show the shift of Bauxite and Alumina as one from
the Western block to the BRICS block. If only the four BRIC countries are considered, their real GDP relative
to the world equivalent more than doubled from 11% in 2000 to 26% in 2023. Using GDP measured at PPP,
the BRIC share exceeded 33% in 2023 as compared to 18% in 2000. Improvement has been particularly
impressive for countries such as China (second largest share of global GDP measured at PPP) and India
(third on the same scale).16 The impact of the BRIC economies on the global primary Aluminium industry has
been even more significant, not only in terms of surging demand but also on the supply side of the market.
16 World Development Indicators | DataBank (worldbank.org), last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 36While raw material, energy, and capex account for about a third each of total Aluminium production costs,
energy cost varies the most among different countries. It is due to low energy cost that the Middle East has
emerged as a significant producer in the global Aluminium market. Countries like Bahrain and UAE look at
Aluminium export as just another form in which to export energy.
71.43%
47.03% BRIC (Brazil, Russia, India, China)
32.60%
Western World (Western & Central
11.44% Europe and North & South America)
2000 2022
Figure 7: Share of Developed & BRIC Economies in Global Primary Aluminium Production
Historically, India’s primary Aluminium sector has seen four waves of growth. It is captured in the table below:
India’s Aluminium
Period Companies Smelters
production17
Pre-Independence • INDAL (a subsidiary of • Alupuram (1938) (included under the
ALCAN) British production)
• Jaykaynagar (1942)
• Aluminium Corporation of
India
During Post- • INDAL • Hirakud (1957-58) • 0.018 MTPA
Independence
• Hindalco • Renukoot (1958)
Industrialization
• MALCO • Mettur (1965)
• BALCO • Korba (1965)
Pre-liberalization • INDAL • Belgaum (1970) 0.185 MTPA
• NALCO • Angul (1981)
21st Century • Vedanta • Jharsuguda (2008) 4.16 MTPA
• Hindalco • Mahan, Aditya (2013)
The Aluminium sector in India has undergone significant changes over the years, including divestment by
original owners, capacity expansions at existing smelter locations, and various regulatory shifts, especially in
the energy sector. These changes have influenced both the primary and secondary Aluminium industries.
Domestic Aluminium production began after the discovery of the Hall-Heroult process, with the establishment
of the Indian Aluminium Company in 1943, boasting an installed capacity of 2,500 tonnes per annum (TPA).
Later, key players like HINDALCO (1962), MALCO (1965), and BALCO (1965) entered the market, with
BALCO now owned substantially by Vedanta. The public sector unit NALCO was established in 1981 with an
installed capacity of 218,000 TPA. Today, India's installed capacity for primary Aluminium production stands
at 4.2 MT, and the country was the second-largest Aluminium producer globally in 2023. From producing just
a few thousand tonnes per annum in the 1950s, India's Aluminium production has grown to 4.16 MT annually.
The secondary and downstream Aluminium segment in India has also seen rapid growth since the 1980s,
with Aluminium Industries Ltd. (ALIND) and India Foils Limited leading the initial efforts. Today, this segment
has a cumulative processing capacity of close to 4 MTPA, represented by the Aluminium Secondary
Manufacturers’ Association (ASMA). The sector primarily relies on Aluminium scrap rather than Bauxite ore/
17 Minerals yearbook 1990 Year 1990, Volume 2 1990 - Full view - UWDC - UW-Madison Libraries (wisc.edu)
Vision Document on Aluminium Metal for India 37Alumina, making India the largest importer of Aluminium scrap. This reliance is due to the high capital, energy,
and raw material costs associated with primary Aluminium production.
The history of the Aluminium sector is closely linked with the power and Bauxite mining sectors. Post-
independence, smelters like MALCO, Hirakud, and Renukoot were conceptualized alongside large hydro-
power projects. However, the lag in power generation capacity compared to energy demand growth led to a
transition to Coal-based captive power in the 1990s. Aluminium players then sought captive Coal mines for
energy security, but this was disrupted in 2014 with the deallocation of Coal mines. High premiums were bid
for Coal mines, and now, with energy security issues settling, the sector is shifting towards renewable energy,
affecting the energy mix. The state-owned power transmission and distribution sector, a significant consumer
of Aluminium, has limited affordability to absorb high prices due to financial constraints. MALCO was sold to
Vedanta Resources as its Bauxite reserves dwindled, and its plant remains non-operational. BALCO
continues to struggle with patchy deposits. India's Alumina refining growth has partially relied on the patchy
Bauxite deposits of the Chhota Nagpur plateau and Central India. Most of the large blocks in Maharashtra
and other central Indian states have nearly exhausted, making Vedanta Aluminium dependent on imported
Bauxite. A refinery in Andhra Pradesh remains inoperative due to a lack of Bauxite18. Odisha boasts the
largest share in India’s Bauxite reserves and resources. The rich deposits in the Eastern Ghats remain largely
inaccessible, even though the state mining player OMC has been allocated more blocks through government
dispensation. OMC continues to auction its Bauxite while maintaining price fixation. The recent Supreme
Court ruling about the right of states to impose taxes on mining companies, for mining rights and mineral
bearing lands, on retrospective basis will impact Bauxite mines and Coal-buying Aluminium companies in
Odisha immediately. Retrospective taxes on Odisha mines will impact NALCO and Hindalco the most and
also Vedanta Aluminium if MCL passes on any of these taxes’ impositions to the customers. If Jharkhand and
other states also start imposing retrospective taxes, then primary Aluminium sector will be severely impacted.
There are several lessons to be taken from USA’s and China’s Aluminium sector strategy. In 1980, US primary
Aluminium production peaked at 4.7 MT from about 30 smelters. By 2000, USA was down to about 23 primary
Aluminium smelters. Currently USA produces less than 1 MT of primary Aluminium in about 4 operating
smelters. The rest of the US production of over 3 MT comes from the secondary sector which processes
scrap. There is a limit to which scrap based secondary production can go because it is limited by the amount
of scrap generated and collected. The main reason given by US primary producers behind closure of the
smelters has been the high cost of energy. Also, the bauxite for US refineries was predominantly imported.
Today, US meets about half of its Aluminium demand from imports. Over half of these imports come in from
Canada which enjoys low production cost due to its access to hydropower. Between 2018 and 2022, USA
imposed import tariffs and tariff rate quotas on Aluminium and its derivative products to protect whatever little
capacity remains in that country. US industry’s denouement shows that not managing raw material availability
and energy price led to a situation where the domestic production is in a non-competitive downward spiral
compared to imports19.
On the other hand, China’s Aluminium production today is overwhelmingly through the primary route. The
Chinese primary Aluminium industry grew from just 0.4 MT in the 1980s to over 40 MT in 2023. This
remarkable growth can be attributed to several key factors. While the USA shifted its focus away from primary
Aluminium, China promoted its primary industry through substantial government support in terms of policies
and subsidies. In 2006, China recognized Aluminium as a “Pillar Industry,” emphasizing the government’s
significant role. Investments in infrastructure and energy projects, along with heavy investments by Chinese
companies in modernizing production facilities and adopting advanced technologies, increased efficiency and
output, making Chinese Aluminium more competitive globally. By focusing on large-scale production, China
reduced costs and increased production capacity, allowing its companies to dominate the global market.
Additionally, many Chinese Aluminium producers integrated their operations vertically, controlling everything
from bauxite mining to Aluminium smelting and processing, which streamlined operations and reduced costs.
Since the coal-based power costs in China are also high, they have continuously sought newer manufacturing
18 Andhra Pradesh to present arguments in bauxite case in London court next week, Indian Express, 25-Sept-2021, last accessed on
04-Oct-2024
19 U.S. Aluminum Manufacturing: Industry Trends and Sustainability, Congressional Research Service, 26-Oct-2022
Vision Document on Aluminium Metal for India 38and digital technologies to reduce the per-ton power consumption. Today when the world looks to become
greener, China has accumulated sufficient scrap-worthy Aluminium in its economy which it can use to sustain
a shift to secondary route. Still China looks to stay invested in primary Aluminium. All it now needs to do is to
keep relevant tax proposals that retains its Aluminium scrap in the country. China is a good example of a
timely and well-thought-through capacity expansion story that will sustain its leadership position in Aluminium
for years to come20.
Indian Aluminium sector growth has followed a step-function with long periods of gap between successive
capacity additions. This is unlike the steel sector, which has seen continuous production growth. The main
reasons behind low capacity CAGR of Aluminium industry compared to steel are –
➢ Relatively under-developed end-use industry (like Aerospace manufacturing) and low penetration of
Aluminium in standard segments vis-à-vis global standards
➢ High capex per-tonne of capacity
➢ Difficult raw material and energy security scenario
➢ Increasingly lack of clarity around the evolving energy and carbon footprint of the country is making it
difficult to commit capacities
Indian regulations with respect to energy and raw material have dominated the mind space of Aluminium
CEOs in India. Indian secondary sector’s dependence on imported scrap on account of higher price of
domestic primary Aluminium coupled with the lack of proper scrap recycling environment in the country is
likely to become a source of risk for the sector in the event of a global supply chain challenge. The learnings
from history can now be summarized:
1. India is today the second largest producer of primary Aluminium in the world. However, there is no
guarantee of staying a permanent leader in the global pecking order unless the factors of production and
the conditions of sale remain stable, predictable, and efficient.
2. Some policies have at times, perhaps inadvertently, created situations where the source of competitive
advantage of Indian Aluminium has been put under stress. Policy making should be cautious and well
thought-through so that adverse unintended consequences do not play out to the disadvantage of the
sector. Also, policy clarity and policy stability are crucial for the sector to make meaningful decisions.
Downstream sector development is heavily reliant on various fiscal and non-fiscal policies (industrial,
land, power policies etc.) of the central and state governments and the longevity of any policy
dispensation is crucial.
3. Aluminium is a metal of geo-strategic significance. Smooth and economic availability can help a country
sustain through tough times.
4. Aluminium has faced continuous challenge of substitution throughout its history and a proper supportive
environment that balances the needs of the primary and secondary sector can ensure sustenance of the
sector.
2.3 Value Chain and Industry Structure21,22
The Aluminium industry is divided into two main segments: upstream and downstream. The upstream sector
focuses on extracting Aluminium from Bauxite ore to produce primary, or unwrought Aluminium, typically in
the form of ingots, billets, or slabs. Conversely, the downstream sector transforms Aluminium into semi-
finished products like rods, bars, rolled products, castings, forgings, and extrusions, using primary Aluminium
or recycled Aluminium (secondary production), or a combination of both:
20 The Development of Aluminum Industry and Technology in China, International Aluminium Institute, last accessed on 04-Oct-2024
21 The Aluminium value chain and implications for CBAM design, ERCST, Jun-2021
22 Aluminiumleader.com, last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 391. Bauxite Mining: Bauxite, the mineral ore that contains Aluminium, is extracted through opencast mining.
The mined ore is mostly sent directly to an Alumina refinery.
2. Alumina Refining: Bauxite undergoes the Bayer process to extract Alumina. This involves dissolving it
in caustic soda, separating impurities, and calcining Aluminium hydroxide to produce pure Alumina. It
leaves behind bauxite residue (red mud). Approximately 6-7 tonnes of Bauxite ore is required to produce
2 tonnes of Alumina.
3. Primary Aluminium Production: The Hall-Heroult process converts Alumina into molten Aluminium
through electrolysis in a cryolite bath. The molten Aluminium is then alloyed and cast into semi-finished
products, with 2 tonnes of Alumina producing 1 tonne of Aluminium.
4. Secondary Aluminium Production: Aluminium products can be disposed of or recycled back into the
supply chain. Scrap Aluminium is collected, melted down, and resold. Recycling involves re-melting and
molding, and some smelters specialize in processing scrap Aluminium, while others handle both Alumina
and scrap. This process uses only 1/20th of the energy needed for primary Aluminium production.
Figure 8: Aluminium Value Chain
5. Aluminium Semis: The downstream sector transforms primary Aluminium into value-added products.
Molded products like billets and slabs are converted into semi-fabricated products such as flat-rolled
products, extrusions, and castings for manufacturing use.
• Extrusion: Aluminium billets are heated and forced through a die to create profiles for various
applications.
• Rolling: Aluminium ingots are rolled into sheets, foils, or plates for diverse uses.
• Casting: Molten Aluminium is poured into molds to create complex shapes for various industries.
6. End-use: Semi-fabricated Aluminium products are usually delivered to industrial customers for final
fabrication into finished items such as cans, cables, window frames, automobile parts, and aircraft
components. Fabrication involves the use of machining, pressing, shaping etc. These finished products
are utilized by various consumers for numerous applications.
Table 4: Application of Aluminium in different end-use sectors
# Sector Applications
Aluminium foil, aerosol cans, beverage can body and end, caps &
1 Packaging
closures, collapsible tubes
Vision Document on Aluminium Metal for India 40# Sector Applications
Bus body, commercial vehicles, Trucks, passenger cars, rail coach, two
2 Transportation
wheelers, marine and aircraft
Cladding, portioning, composite panels, curtain rod, doors and window,
Building &
3 facades, false ceiling, rolling shutters, roofing, siding, formwork,
Construction
scaffolding, ladder
Transmission and distribution lines, solar panel frames, electrical fans,
4 Electrical
lamp caps, luminaires, bus bars
Machinery & Cladding, ducting, lithographic plates, machinery, motor body, solar
5
Equipment panels, ventilation etc.
Kitchen cabinet fittings, Furniture, Pressure cooker, non-stick cookware,
6 Consumer Durables
pots & pans, Air Conditioners, refrigerator, Washing machine
7 Others Defence & aerospace application
Global Dominance across the Value Chain
Primary Aluminium Downstream
Bauxite Reserves Bauxite Production Alumina Production
Production Products Exports
(World: 30 BnT) (World: 400 MT) (World: 137.5 MT)
(World: 70.6 MT) (World: 26.7 MT)
•Guinea (25%) •Australia (25%) •China (60%) •China (59%) •China (30%)
•Vietnam (19%) •Guinea (24%) •Australia (14%) •India (6%) •Germany (9%)
•Australia (12%) •China (24%) •Brazil (7%) •Russia (5%) •USA (7%)
•Brazil (9%) •Brazil (8%) •India (5%) •Canada (4%) •Turkey (4%)
•Jamaica (7%) •India (6%) •Russia (2%) •UAE (4%) •Italy (4%)
Figure 9: Bauxite to Aluminium: Top five – across the chain, 2023
Despite possessing only 2.4% of global Bauxite reserves, China has been a significant, or rather the largest,
contributor across the value chain. It is not only the largest producer of Aluminium but also the largest
consumer. India, on the other hand, is a significant contributor to Bauxite, Alumina, and primary Aluminium
production but lags behind in downstream production capabilities.
The Aluminium industry's value chain is a testament to the intricate processes involved in transforming raw
material into a versatile product. The sector's sustainability and efficiency are increasingly important
considerations as it evolves to meet global demands.
2.4 Importance as a Strategic Sector23
The Aluminium industry has solidified its position as a strategic industrial backbone for numerous nations
worldwide. This strategic designation is a testament to its critical role in defense, national security, critical
infrastructure, and economic growth. Governments across the globe have recognized the Aluminium
industry's potential to drive technological advancement and foster sustainable development. Consequently,
they have implemented a range of supportive policies, including financial incentives, tax breaks, research and
development funding, and infrastructure investments.
23 Op-Ed: Our National Security Depends on a Healthy Aluminium Industry | U.S. Department of Commerce
Vision Document on Aluminium Metal for India 41China's early recognition of Aluminium's strategic importance, designating it as a "pillar industry," has
propelled its dominance in global production and processing.24 As per the US National Strategic and Critical
Minerals Production Act of 2013, strategic and critical minerals are defined as necessary for national defense
and security requirements, energy infrastructure (including pipelines, refining capacity, electrical power
transmission and generation, and renewable energy production), domestic manufacturing, agriculture,
housing, telecommunications, healthcare, and transportation infrastructure, as well as the nation’s economic
security and balance of trade. Russia, with its abundant resources, leverages Aluminium as a strategic asset
for its defense industry. In Europe, the EU has outlined a long-term vision for the non-ferrous metals sector,
aiming to maintain a competitive and sustainable Aluminium industry. Canada, with its hydroelectric power
and Bauxite reserves, is a major producer.25 South Korea and Taiwan, early adopters of Aluminium as a
strategic sector, continue to have a strong presence in Aluminium processing. Emerging economies like
Malaysia, Indonesia, and the UAE26 have also identified Aluminium as a key driver of industrial growth.
The notion of ‘strategic minerals’ or ‘critical minerals’ is relatively new to policymakers in India compared to
other major economies. According to the Council on Energy, Environment, and Water’s (CEEW) report on
non-fuel minerals in 2016, Aluminium was classified under Zone III with low economic importance and low
supply risk (least critical).27 Despite this, India recognized Aluminium as a vital metal in wartime28. However,
strategic importance of Aluminium for India today spans economic growth, infrastructure development,
defense, transportation, sustainability, and global competitiveness. Its versatile applications and alignment
with national priorities make it a critical material for India’s development and strategic interests.
Government policies are instrumental in shaping the Aluminium industry's trajectory. Financial incentives, tax
breaks, research and development funding, and infrastructure investments are common tools used to
stimulate growth and innovation. Trade policies, environmental regulations, and energy policies also
significantly influence the industry's competitiveness and sustainability. The global shift towards a low-carbon
economy presents unprecedented opportunities for Aluminium. Its lightweight properties make it a crucial
material for electric vehicles, renewable energy infrastructure, and energy-efficient buildings. Moreover, its
infinite recyclability aligns perfectly with the circular economic principles.29 To capitalize on these
opportunities, countries must invest in research and development, promote sustainable practices, focus on
creating new demand through product innovation and build resilient supply chains.
Aluminium's strategic importance is undeniable. It is a versatile metal that underpins
numerous sectors and drives economic growth. By adopting comprehensive policies
nations can harness Aluminium's full potential and contribute to a greener and more
prosperous future.
24 Li, S., Zhang, T. The Development Scenarios and Environmental Impacts of China's Aluminium Industry: Implications of Import and
Export Transition. J. Sustain. Metall. 8, 1472–1484 (2022). https://doi.org/10.1007/s40831-022-00582-0
25 Quebec Budget 2024: Business Funding for a Strong Economy (mentorworks.ca)
26 Dubai seeks to become industrial hub in line with Dubai Industrial Strategy 2030 vision - The Economic Times (indiatimes.com)
27 India’s Critical & Strategic Non-Fuel Minerals for Manufacturing Sector (ceew.in)
28 82-85.PDF (nmlindia.org)
29 New IAI Study Reveals Environmental Benefits of Increased Global Aluminium Can Recycling - International Aluminium Institute
(international-Aluminium.org), last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 423. Present Scenario of
Global Aluminium Industry
Vision Document on Aluminium Metal for India 433 Present Scenario of Global Aluminium
Industry
30
3.1 Per-capita Consumption In India & Global31,32,33
Often dubbed as the "metal of the future," Aluminium is a critical material in modern industries due to its
unique properties, including lightness, strength, corrosion resistance, and recyclability. Known for its
adaptability and wide range of applications, Aluminium is an essential metal in many sectors, including
packaging, aircraft, and transportation in addition to building and construction. Gaining insight into the
demand for Aluminium consumption in various nations might help one better understand their industrial,
technological, and economic development. In this regard, the amount that different countries use Aluminium
in their daily lives can be determined by looking at per capita Aluminium consumption. This section compares
India and the top nations based on per capita use of Aluminium to provide insight into how they use this
essential metal and the effects it has on their industrial sectors and economy.
In the figure below, developed nations, where sectors like automobiles, construction, and aerospace are
mature, have the highest per capita Aluminium consumption. With a per capita consumption of 42.76 kg of
Aluminium, South Korea is currently the world's largest Aluminium consumer. Bahrain and Germany, with a
per capita Aluminium consumption of 32 kg and 31 kg, respectively, come right after South Korea.
Figure 10: Country wise Per Capita Aluminium Consumption, 2022
South Korea (Per capita consumption: 42.76 kg)
Owing to its expansive and export-oriented automobile and electrical sectors, South Korea's per capita
Aluminium consumption was the highest globally in 2022. However, since South Korea is not one of the top
Aluminium producers, it depends on imports to meet its metal requirement. In 2023, the country's Aluminium
imports were USD 8.20 billion, with primary Aluminium (46%) accounting for most of the total Aluminium
imports, followed by Aluminium scraps (20%) and plates, sheets & strips (16%).
30 Note: In this report, the import and export data of ITC Trademap has been averaged to demonstrate trade of Aluminium
Commodities
31 https://www.alcircle.com/news/2022-per-capita-Aluminium-consumption-ranking-the-world-s-top-10-countries-96308
32 ITC Trademap, last accessed on 10-Aug-2024
33 Mineral Commodity Series, USGS
Vision Document on Aluminium Metal for India 44Bahrain (Per capita consumption: 32 kg)
Aluminium consumption in Bahrain is significantly influenced by Aluminium firms operating in the kingdom,
especially Aluminium Bahrain (Alba), which is one of the biggest smelters of Aluminium worldwide. Bahrain
produced 1.6 MT of Aluminium in 2023, making it self-sufficient in Aluminium. Infrastructure, technological,
and human resource investments, among other government initiatives and policy support, have contributed
to the growth of Bahrain's Aluminium sector.
Germany (Per capita consumption: 31 kg)
Due to the low level of Aluminium production in the nation, a sizable portion of the need for Aluminium comes
from imports. With USD 22.89 billion of Aluminium imports, Germany was the 2nd largest importer in 2023.
Germany’s Aluminium imports are dominated by primary Aluminium, followed by downstream Aluminium
products and scraps. This reliance on imports underscores the importance of Aluminium for Germany’s
automotive and construction industries markets. Consequently, the dynamics of international trade have a
big influence on Germany's industrial output and economic growth. Germany was also the 2nd largest exporter
of Aluminium in 2023 majority of which comprised downstream products and nearly 10% of the exports
comprised scraps.
Italy (Per capita consumption: 29 kg)
Italy is the 6th largest importer and 5th largest exporter of Aluminium by value. The country imported Aluminium
worth USD 8.52 billion in 2023, of which primary Aluminium (39%), plates, sheets & strips (14%) and
Aluminium scraps (12%) accounted for nearly 65% of the total Aluminium imports. Such consumption reflects
the nation's booming manufacturing industries, which include construction, packaging, automobile, and
electronics industries. Italy exported USD 8.69 billion worth of Aluminium mostly consisting of downstream
products.
China (Per capita consumption: 28 kg)
China is the world’s largest Aluminium consumer, driven by its vast population and 5th highest per capita
Aluminium consumption, indicating a substantial demand for this non-ferrous metal within the populous
nation. China mostly relies on domestic sources for this demand, with its annual Aluminium production
reaching an impressive 41 MT in 2023. However, China was also the 3rd largest Aluminium importer with USD
12.35 billion of imports. Primary Aluminium (49%) constituted nearly half of its total imports, followed by scraps
(28%). China was also the largest exporter of Aluminium (USD 34.98 billion). More than 90% of China’s
Aluminium exports consisted of downstream products.
Greece (Per capita consumption: 26.6 kg)
Because of its very low production, Greece mostly depends on imports to meet its high per capita Aluminium
consumption requirement. Greece's Aluminium imports were USD 1.58 billion in 2023, more than 86% of
which constituted primary Aluminium (64%) and scraps (22%).
USA (Per capita consumption: 15 kg)
In 2022, the USA was the 2nd largest consumer of Aluminium metal with 4.76 MT and was ranked 7th in per
capita Aluminium consumption. Most of the country’s Aluminium demand is met through secondary
Aluminium production, imports and some through domestic primary Aluminium production. This is ironic
because Charles Martin Hall, one of the pioneers of Aluminium electro-metallurgy and an early Director at
Alcoa, championed primary Aluminium production in this country. The USA was the largest importer of
Aluminium with USD 28.30 billion of imports, most of which constituted primary Aluminium. The country also
produced nearly 3.3 MT of secondary Aluminium in both 2022 and 2023. USA was the 3rd largest Aluminium
exporter (USD 14.28 billion) and the largest exporter of Aluminium scrap (USD 3.74 billion) in 2023.
France (Per capita consumption: 14.92 kg)
France ranked 8th in per capita Aluminium consumption, mainly due to its expanding and popular automobile
sector. Like many top Aluminium consumers, France is dependent on imports to meet its demand due to
limited domestic production capability. This again is ironical because Paul Heroult, the pioneer of primary
Vision Document on Aluminium Metal for India 45Aluminium production was instrumental in starting on the earliest Aluminium producing companies in the
world, Pechiney, in France. In 2023, France imported USD 8.52 billion worth of Aluminium, mainly comprising
downstream products. France also exported Aluminium worth USD 6.5 billion mostly consisting of
downstream products.
Spain (Per capita consumption: 14 kg)
Spain is also dependent on imports to meet its Aluminium demand. In 2023, Spain ranked 16th in Aluminium
imports (USD 5.02 billion) and 15th in exports (USD 5.22 billion). The country mainly imported primary
Aluminium and scraps and exported downstream products.
Canada (Per capita consumption: 13 kg)
Canada’s Aluminium demand is primarily met through its domestic primary Aluminium production. It produced
nearly 3 MT of primary Aluminium in 2023. Canada ranked 4th in Aluminium exports (USD 12.61 billion) and
15th in Aluminium imports (USD 5.10 billion). The country mostly imported downstream products and exported
primary Aluminium and scraps. ALCAN which started out as a subsidiary of Alcoa with most of its non-
American assets, was at one time the largest Canadian company. ALCAN’s end as an independent company
in 2007 through a bidding war between Alcoa and Rio Tinto, which Rio Tinto eventually won, is a case study
in itself about multi-national operations in metals and mining sector.
Japan (Per capita consumption: 13 kg)
Japan, the fourth-largest economy in the world34, depends on imports of Aluminium to meet the demand
because of lack of domestic resources. Owing to its advanced automobile industry's requirements, the country
imported USD 8.2 billion worth Aluminium in 2023.
Sweden (Per capita consumption: 13 kg)
Sweden was ranked 10th in per capita Aluminium consumption in 2022, but its overall Aluminium demand is
very low owing to the small population of the country.
India (Per capita consumption: 3 kg)
Despite being the fifth largest economy in 2022, India’s per capita Aluminium consumption of 3 kg is well
below the global average of 12 kg. India needs to increase its Aluminium consumption more than five-fold to
achieve the global average at current levels.
The top ten per capita Aluminium consuming countries are an example of the global demand and
dependence on this versatile metal. From tall skyscrapers to complex machines, Aluminium plays a
central role in shaping the modern world. As these countries prioritize sustainability, innovation and
economic growth, their steady consumption of Aluminium is a testament to its irreplaceable value.
Together, they form a collective force, paving the way to a brighter, Aluminium-rich future.
3.2 Current Scenario on Aluminium Production and Trade
3.2.1 Global Aluminium Production35,36
Historical Trend of Aluminium Production
Since the beginning of this century, global Aluminium production has nearly tripled over the past 22 years,
from 36.7 MT in 2001 to 108.2 MT in 2022. However, owing to the environmental benefits, secondary
Aluminium (5.5% CAGR) production has outpaced the growth of primary Aluminium (4.8% CAGR).
34 https://www.forbesindia.com/article/explainers/top-10-largest-economies-in-the-world/86159/1
35 International Aluminium Institute, last accessed on 10-Aug-2024
36 Mineral Commodity Series, USGS
Vision Document on Aluminium Metal for India 46108.2
102.9
98.8
96.1 96.2
93.9
88.2
85.3
39.2
80.4 35.8
76.6 33.5
72.5 30.5 31.9 32.6
68.6 28.3
26.8
63.0 25.8
58.1 24.3
55.2 55.7 23.3
50.3 22.3
47.4 20.7
39.1 41.7 44.5 17.0 18.1 18.0
36.7 16.3
15.4
14.6
12.1 13.0 13.8 58.5 59.9 63.4 64.2 63.6 65.3 67.1 69.0
46.3 49.2 52.3 54.6
38.1 40.0 37.7 42.4
24.5 26.2 28.0 29.9 31.9 33.9
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Primary Secondary
Figure 11: Global Primary Aluminium Production, 2001-2023 (MT)
Back in 2001, Aluminium production was concentrated in the regions of North and South America, Europe,
and Russia. These regions contributed to more than 60% of the global Aluminium production. However, due
to the soaring global demand for this versatile metal, largely driven by economic powerhouses like China and
India, the production has shifted to Gulf and Asian nations like UAE, Bahrain, India, and China.
While the contribution to primary Aluminium production in 2023 from Gulf and Asian countries has surged to
over 74%, a remarkable increase from the mere 23% recorded in 2001, the share from the regions of North
and South America, Europe, and Russia has dwindled to a mere 17% in 2023, down significantly from the
60% in 2001. Similarly, for secondary Aluminium, the share of Gulf and Asian countries has double in 2021
to 58% from 29% in 2001. However, owing to the growing climate concerns and low availability of Bauxite
reserves, North America and Europe still accounted for nearly 31% of the secondary Aluminium production
in 2023.
2023 2021
Primary Secondary
Aluminium Aluminium
3%2% 6%
2%
Pr 7o 0d .6u c Mti Ton 7%
15%
Pr 3o 5d .8u c Mti Ton
2%6%
13%
14% 10%
29% 5%
21%
2001 3% 12% 2001
9%
Primary Secondary
Aluminium 36% Aluminium
Production 9% Production
9% 24.5 MT 8% 12.1 MT 15%
15% 6%
59%
7%
1% 2%
31% 23%
21%
Africa North America North America South America Europe
South America Europe
Oceania Gulf Cooperation Council Oceania Middle East Asia (ex China)
Asia (ex China) China China Others
Figure 12: Global Primary Aluminium Production Figure 13: Global Secondary Aluminium Production
Distribution Change, 2001 and 2023 Distribution Change, 2001 and 2021
Vision Document on Aluminium Metal for India 47China's share of global primary Aluminium production increased from 3.37 MT in 2001 to 41.67 MT in 2023,
with a CAGR of 11.55%. Gulf countries produced no Aluminium in 2001, increasing to 6.62 MT in 2023.
Overall, excluding China, Asian countries have shown an increase in Aluminium production at a CAGR of
3.26%. However, India’s production has increased at a significantly higher CAGR of 8.68% from 2001-02
(0.60 MT) to FY24 (4.16 MT), making it the second fastest growing country in terms of Aluminium production.
Country wise Primary Aluminium Production, 2023
In 2023, China was the largest producer of primary Aluminium, accounting for 59% of global production. It
was followed by India and Russia, which contributed 6% and 5% respectively, bringing the total contribution
of these three countries to nearly 70% of global production. Including these countries, the top 10 Aluminium-
producing countries accounted for 87.5% of global production.
Figure 14: Global Primary Aluminium Production 2023 (MT)
3.2.2 Top Aluminium Producers37
Primary Aluminium Producers
7.4
6.88
6.5
6.0
4.2
3.8 3.73.6
3.4
3.0
2.82.7
2.52.5 2.32.3 2.32.2 2.32.1
Chinalco Hongquiao UC Rusal Xinfa Rio Tinto EGA SPIC Vedanta East Hope Norsk
Group Group Hydro
Capacity Production
Figure 15: Top 10 Primary Aluminium Producers, 2022 (MT)
37 Companies Annual Reports and Websites, last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 48The top 10 producers alone contributed to 51.5% of the global primary Aluminium production in 2022, with
the Chinese companies’ contribution amounting to 31%. UC Rusal was the largest Aluminium producer
(excluding the Chinese producers) in 2022, followed by Rio Tinto, EGA, Vedanta and Norsk Hydro. The
average utilisation of the Aluminium smelters of the top 10 producers was 95%.
Secondary Aluminium Producers38
13%
7%
Novelis Arconic
6%
Constellium Zhongwang
4%
Chinalco Hongqiao
61%
3%
3% Hena ingtai Others
3%
Figure 16: Secondary Aluminium Production
Novelis stands as the global leader in Aluminium recycling with 14 recycling facilities across four continents.
The company pioneered the first and largest closed-loop recycling systems for automotive Aluminium. Each
year, Novelis recycles over 82 billion used beverage cans. Novelis plans to expand its recycling capacity to
more than 2.9 MT by FY27 from current capacity of 2.2 MT.
Hydro operates 21 recycling facilities across Europe, North America, and South America, with a combined
annual capacity of approximately 1.4 MT. Currently, about 0.17 MT of post-consumer scrap are utilized in
their recycling operations. Hydro aims to increase its post-consumer scrap recycling capacity to between 0.85
MT and 1.2 MT by 2030. In 2023, Hydro recycled 0.44 MT of post-consumer and 1.05 MT of pre-consumer
Aluminium scrap. Additionally, Hydro sold 51 kt of Hydro CIRCAL, a brand of recycled Aluminium containing
at least 75% post-consumer scrap and boasting a carbon footprint of 1.9 kg CO per kg of Aluminium.
2
Constellium’s recycling capacity stood at 0.65 MT in 2023 and aims to achieve at least half of Aluminium from
recycled sources by 2030. They have also set an intermediate goal of achieving 0.75 MT recycled Aluminium
input by 2026.
3.2.3 Global Trade of Aluminium39
Aluminium is being traded globally in many forms like unwrought Aluminium, Aluminium scraps (raw materials
for secondary Aluminium) and downstream products like Aluminium plates, rods, bars, wire, foil, tubes, pipes,
cans etc. In 2023, Total trade of Aluminium products stood at USD 233 billion. The global trade for the
Aluminium products were down by nearly 16% from 2022 levels. This drop was mainly attributed to factors
like global economic slowdown, geopolitical tension and volatility in the Aluminium market.
By value, unwrought Aluminium (HS Code: 7601) was the most traded product, constituting nearly 31% of
the global Aluminium trade. The other Aluminium products plates, sheets and strips of Aluminium (HS Code:
7606), Aluminium scrap (HS Code: 7602), bars, rods and profiles of Aluminium (HS Code: 7604), Aluminium
38 Hindalco Industries – Capacity expansion, sizing downstream to drive margins, Anand Rathi Research
39 ITC Trademap, last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 49foil (HS Code: 7607), Aluminium structures and parts of structures (HS Code: 7610) and articles of Aluminium-
like nails, bolts, grills etc. (HS Code: 7616) added another 59% of the global Aluminium trades.
11%
9% 31%
7601 7602
2023 Global 7604 7606
8% Aluminium Trade
7607 7610
USD 233 Bn
6% 7616 Others
9%
16%
9%
Figure 17: Product wise Trade of Aluminium Products by Value, 2023
Global Unwrought Aluminium Trade (HS Code: 7601)
Figure 18: Global Trade of Unwrought Aluminium by Volume, 2023
In 2023, the top 10 nations accounted for nearly 71.5% and 65.7% of the world’s imports and exports of
unwrought Aluminium, respectively. All the top 10 nations except China, have low or no Bauxite reserves and
import unwrought Aluminium to meet their Aluminium demand. Russia was the largest exporter of unwrought
Aluminium with nearly 4 MT of exports. Despite having low Bauxite resources, countries like Canada, UAE,
Bahrain, Mozambique and Norway contributed to more than 31% of the global unwrought Aluminium exports.
Today, China dominates both the upstream (primary and secondary Aluminium) and
downstream Aluminium market. India needs to develop its recycling and downstream
sectors, as well as enhance its primary Aluminium capabilities to achieve self-reliance.
Vision Document on Aluminium Metal for India 503.3 Raw Material Scenario40,41,42
Globally, Aluminium is produced through two routes, primary and secondary route. While the primary route
requires Bauxite and Alumina as raw materials, the secondary route requires Aluminium scraps.
3.3.1 Bauxite and Alumina
Primary Aluminium production involves the extraction and processing of raw materials, which are primarily
Aluminium-bearing minerals. The main raw materials used in the Aluminium sector are Bauxite and Alumina.
Bauxite is the primary source of Aluminium for primary Aluminium production. It is a mixture of hydrous
Aluminium oxides, Aluminium hydroxides, quartz, hematite, clay minerals, magnetite, goethite and siderite.
Bauxite is commonly extracted through open-pit mining method and then refined through the Bayer process
to produce Alumina (Aluminium oxide). Alumina is then used as a feedstock for Aluminium production.
Global Bauxite Reserves
Global Bauxite reserves were 29.76 BnT in 2023, with Guinea holding nearly 25% of the world’s reserves.
Vietnam (19.49%), Australia (11.76%), Brazil (9.07%) and Jamaica (6.72%) were other top 5 nations blessed
with nearly 47% of the Bauxite reserves.
Figure 19: Global Bauxite Reserves Distribution, 2023 (BnT)
40 Mineral Commodity Series, USGS
41 International Aluminium Institute, last accessed on 10-Aug-2024
42 ITC Trademap, last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 51Global Bauxite and Alumina Production
391 390 395 400
370
327
309
293
283
275
259 258
238 245
221 227
210
193
178
164
153
137 144 132 131 132 133 139 140 138
100 103 108 115 118 120
52 55 59 62 65 72 80 84 78 91
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Alumina (MT) Bauxite (MT)
Figure 20: Global Bauxite and Alumina Production, 2001-2023 (MT)
World Bauxite and Alumina production increased at a CAGR of 5.23% and 4.89%, respectively, from 2001 to
2023. In 2023, Australia (98 MT) was the largest Bauxite producer closely followed by Guinea with 97 MT
Bauxite production. Over the years, to decrease its dependence on raw materials, China’s production of
Bauxite and Alumina has grown exponentially and has emerged as one of the largest producers of both
Bauxite and Alumina. Despite holding only 2.4% of the global reserves, the country’s Bauxite production has
increased nearly 9.5 times from 9.8 MT in 2001 to 93 MT in 2023. Also, from having zero Alumina production
till 2002, China reached 82 MT of Alumina production in 2023, contributing to 60% of the global Alumina
production. Australia, Brazil, and India along with China accounted for 86% of the global Alumina production
in 2023. On the other hand, although, production of Bauxite and Alumina from India, Australia and Brazil have
increased over the years, their share in global production has either remained constant or decreased.
2023 2023
Bauxite Alumina
10% Production 11% Production
400 MT 137.5 MT
5% 7% 23% 2% 9%
5%
6% 26%
2001 40% 2001
7%
8% Bauxite Alumina 31%
1% Production 39% 1% Production
6% 137 MT 51.6 MT
60%
10% 14%
24% 5%
11% 7% 8%
24%
China Australia Guinea Brazil China Australia USA Brazil
India Indonesia Others India UAE Others
Figure 21: Global Bauxite Production Distribution Figure 22: Global Alumina Production Distribution
Change, 2001 and 2023 Change, 2001 and 2023
Global Bauxite and Alumina Consumption Trend for Aluminium Production
Global consumption for Bauxite and Alumina for Aluminium production was estimated to be around 372 MT
and 141 MT, respectively in 2023. Both Bauxite and Alumina consumption has nearly increased 1.5 times
from 2001 levels.
Vision Document on Aluminium Metal for India 52366 372
356
343
321 327 331
290 297
276
266
250
117 120 127 128 127 131 134 138 141
98 105 109
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Alumina (MT) Bauxite (MT)
Figure 23: Global Bauxite and Alumina Consumption Trend for Primary Aluminium Production, 2012 - 2023 (MT)
Global Trade Scenario for Bauxite and Alumina
Global Bauxite Trade
Figure 24: Global Trade of Bauxite by Volume, 2023
In 2023, the top 10 countries accounted for 99.1% and 99.4% of the global Bauxite exports and imports,
respectively. Guinea and Australia, being the top producers of Bauxite and due to lower domestic demand
for Bauxite, were the top 2 exporters of Bauxite, accounting for nearly 89.3% of total exports. Despite being
one of the largest producers of Bauxite, China imported nearly 141.57 MT of Bauxite, accounting for 87.6%
of the global Bauxite imports to fulfil the demand of its Alumina refinery. Canada (3.83 MT), India (3.78 MT),
Ireland (3.43 MT), and the USA (3.37 MT) are the other nations among the top 5 importers. While the imports
of Canada, Ireland, and the USA can be attributed to the lack or low availability of resources, the Bauxite
imports of India are mainly attributed to the growing demand for the mineral to support its growing Aluminium
consumption and the slow pace of the addition of new Bauxite mining capacities.
Vision Document on Aluminium Metal for India 53Global Alumina Trade
Figure 25: Global Trade of Alumina by Volume, 2023
Global Alumina trade volume was estimated to be ~35 MT in 2023, of which, the top 10 countries accounted
for 72.4% and 94.6%, respectively of the total imports and exports. Of the top 10 exporters of Alumina, except
Spain and Ireland, all other nations are having abundant Bauxite reserves and are also among the top
producers of Bauxite. Both, India and China are among the top 10 importers as well as exporters for Alumina.
However, they are net importers of Alumina.
3.3.2 Aluminium Scrap
Considering the fact that nearly one-third of the Aluminium produced globally is secondary Aluminium,
Aluminium scraps become an important raw material along with Bauxite and Alumina required. The
Aluminium scrap required for secondary Aluminium production is categorized into two types i.e. new scrap
and old scrap. New scrap generally refers to the scrap generated within the Aluminium and manufacturing
industries. Old scrap originates from the end-of-life final products like beverage cans, cars, demolished
buildings, old electrical cabling etc.
37.7
35.2
33.5 34.3
32.0
29.9
21.8 23.6 24.5 25.7
27.2 28.4
6 1 .4 3 .4 1 2 .4 1 2 .4 1
5 .5
1
13 47 .. 75.1 14 00 .. 86.0 14 36 .. 86.8 15 71 .. 87.8 16 25 .. 97.7 17 61 .. 98.7 18 14 .0. 18.5 19 16 .1. 18.7 19 70 .1. 18.7 53 .2. 19 51 .. 30 11 96 .. 30 11 61 .. 41 11 66 .. 51 11 59 .. 61 11 3 .. 72 11 9 .7 11 3 .9 1 1 .0 2 0 .1 2 2 .2 2
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Old Scrap New Scrap
Figure 26: Global Old and New Scrap Generation Trend, 2001-2021 (MT)
The world generated 37.7 MT of Aluminium scrap in 2021 up 2.9 times from 2001. In 2021, China was the
largest Aluminium scrap generator, having 33% share in the globally generated scrap, followed by North
America (21%) and Europe (18%).
Vision Document on Aluminium Metal for India 54Global Aluminium Scrap Trade
Globally, more than 12 MT of Aluminium scrap was traded in 2023. The top 10 countries together accounted
for 68.8% and 58.7% of the total scrap imports and exports, respectively. India and China were the top 2
importers of Aluminium scrap in 2023 with nearly 1.83 MT and 1.75 MT scrap imports, respectively. While
India’s large imports of Aluminium scrap can be attributed to the low availability of domestic scrap, China’s
high imports of scrap are mainly due to the high consumption of the metal in the country. Other countries like
South Korea and Italy mostly depend on recycled Aluminium for meeting their Aluminium demand. USA was
the largest exporter of Aluminium scrap, followed by Germany and Canada, demonstrating the maturity of the
established recycling industry in these countries.
Figure 27: Global Trade of Aluminium Scrap by Volume, 2023
More than 80% of the global Bauxite reserves, over 96% of Bauxite production, and more
than 94% of Alumina production are concentrated in the top 10 countries, giving them
substantial control over the supply of essential raw materials for primary Aluminium
production, potentially influencing prices and availability. Additionally, considering the need
for secondary Aluminium production for the greater good, the Aluminium scrap industry
needs to be strengthened outside China, North America, and Europe.
3.4 Downstream Products
Whether in the US or countries like India, relying solely on primary Aluminium manufacturing is becoming
increasingly challenging. Consequently, companies are shifting their focus to value addition and downstream
manufacturing to capitalize on the rising Aluminium demand.
The downstream segment of the Aluminium industry involves processing Aluminium into semi-finished goods
such as extrusions, rolled products, foils, castings, wire rods etc. These products can be made from primary
Aluminium, secondary (recycled) Aluminium, or a combination of both, depending on the specifications of the
final product.
Vision Document on Aluminium Metal for India 5531.5
30.5
29.6
24.9
23.524.1
22.3
21.221.3
7.4 7.9 8.1 6.0 6.8 5.6 5.8 5.9 6.2
Extrusions FRP Castings Wire Rod Others Foil
2021 2022 2023
Figure 28: Global Aluminium Downstream Products Consumption (MT)
Globally, Aluminium extrusions are the most consumed downstream product, constituting nearly 32% of the
global downstream products consumption, followed by (flat rolled products) FRP (25%), Castings (22%), wire
rods (8%) and foils (6%). While, Aluminium castings are predominantly used in the transportation sector, FRP
and foils are mostly used in the packaging industry. Extrusions find their major application in the building and
construction sector and wire rod is almost used entirely in the electrical sector.
Extrusions 17% 56% 7% 10% 6% 4%
FRP 16% 10% 47% 10% 7% 8% 4%
Casting 78% 4%3% 12% 3%
Transportation Buildings and Construction Packaging Electrical and Electronics
Industrial Consumer Durables Others
Figure 29: Sector wise Consumption of Aluminium Downstream Products, 202343
Global Aluminium Downstream Products Trade (HS Code: 7603 to 7616)44
In 2023, the global trade of Aluminium downstream products stood close to 27 MT. China’s dominance in the
downstream sector is demonstrated with 30.3% share in the global Aluminium downstream products exports.
USA and European countries like Germany, France, Italy and Netherlands were both the importers and
exporters of downstream products. While USA, France and Netherlands were net importers, Germany and
Italy were net exporters of the downstream products.
43 Aluminium Industry Outlook 2024, Al Circle
44 ITC Trademap, last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 56Figure 30: Global Trade of Aluminium Downstream Products by Volume, 2023
Aluminium Alloys45
Certain specialised applications of Aluminium necessitate alloying to attain the specific product characteristics
needed for use in those industries. In the Aluminium industry, the 1xxx, 2xxx, 3xxx, 4xxx, 5xxx, 6xxx, 7xxx,
and 8xxx series represent different categories of Aluminium alloys, each with unique properties and
applications. These series are part of a classification system created by the Aluminium Association, which
organizes Aluminium alloys based on their primary alloying elements.
Aluminium Main Alloying
Characteristics Applications
Alloy Element
Packaging, Building product,
High corrosion resistance,
Minimum 99% Electrical conductors,
1xxx excellent workability, and high
Aluminium content chemical equipment, and food
thermal and electrical conductivity
processing
Aerospace, Defence, Space
High strength, good machinability,
2xxx Copper and high-performance
but lower corrosion resistance
applications
Good corrosion resistance,
Beverage can, Building
3xxx Manganese moderate strength, and good
product
workability
Castings, Cladding on brazen
Lower melting point, good wear sheet, Welding wire, brazing
4xxx Silicon
resistance, and good fluidity alloys, and automotive
components
Marine, pressure vessels
High strength, good corrosion
5xxx Magnesium (LNG carrier) and automotive
resistance, and good weldability
parts.
45 Material Properties I.pptx (uc.edu)
Vision Document on Aluminium Metal for India 57Aluminium Main Alloying
Characteristics Applications
Alloy Element
Structural applications,
Magnesium and High strength, good corrosion
6xxx architectural components,
Silicon resistance, and good weldability
and auto structural sheet
General Engineering,
Very high strength, good fatigue
Aerospace, sporting
7xxx Zinc resistance, but lower corrosion
equipment, and high-stress
resistance
components
Auto body sheet, Specialized
Varies widely depending on the applications like lithium-
8xxx Others
specific alloying elements used containing alloys for
aerospace
Top Downstream and Value-Added Products Manufacturers46
Novelis
Novelis, a subsidiary of Hindalco Industries Limited, is a global leader in the Aluminium rolling and recycling
sector. It is a premier provider of sustainable Aluminium solutions for the aerospace, automotive, beverage
packaging, and high-end specialty products markets. Novelis is also the largest single producer of Aluminium
flat-rolled products for the beverage can and automotive industries worldwide. Novelis’ shipped 3.67 MT FRP
shipments to its customers around the world in FY24.
Hindalco’s Novelis completed the acquisition of Aleris, global leader in Aluminium rolled products and
specialty alloys supplying to diverse industries including aerospace, automotive, building and construction,
commercial transportation and industrial manufacturing, in April 2020.
Hydro Norsk
Hydro Extrusions is the global leader in Aluminium extrusion-based solutions, boasting 71 production sites
across 40 countries. This extensive reach is supported by a blend of local expertise, a robust global network,
and cutting-edge research and development capabilities. Hydro has an annual extrusion capacity of 1.3
MTPA and in 2023, the company achieved 1.1 MT of extrusion products sales. This performance secured a
market share of 17% in Europe and 20% in North America, while also maintaining strong positions in South
America and Asia.
Zhongwang Holdings Limited
China Zhongwang Holdings Limited, along with its subsidiaries, is one of the largest developer and
manufacturer of industrial Aluminium extrusion products. The Group primarily focuses on lightweight
development in the transportation, machinery and equipment, and electric power engineering sectors by
providing high-quality processed Aluminium products.
Constellium
Constellium, a global leader in Aluminium transformation, designs and manufactures innovative, high value-
added Aluminium products and components. These are primarily tailored for the aerospace, automotive, and
packaging markets.
Constellium developed advanced alloys for the aerospace market, Airware®, which first ventured into space
in 1998, was used for cryogenic components of the space shuttle's external tank. Airware® 2195 offered
enhanced damage tolerance and corrosion resistance and substantially increasing its payload capacity. Its
diverse range of products also include 3xxx, 5xxx, and 6xxx Aluminium sheet solutions for battery enclosures,
46 Companies Websites, Annual Reports and Investor Presentations, last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 58including the cladded cooling plates that help maintain batteries in their optimal temperature range. The
company shipped 1.49 MT downstream and value-added products in 2023.
Arconic
Arconic provides a diverse range of highly differentiated Aluminium sheets, plates, and extruded products for
the aerospace, automotive, commercial transportation, brazing, and industrial markets. They are also a key
supplier to the building and construction sector, offering innovative products and systems that assist
architects, builders, and project teams in realizing their vision for modern, beautiful, and high-performing
buildings. Arconic is also a market leader in Aluminium-lithium extrusions, holding a prominent role in the
production of components for the Airbus A380, Airbus A350, and Gulfstream G650.
Kaiser Aluminium
Kaiser Aluminium is a leading producer of fabricated Aluminium products for aerospace, high-strength,
general engineering, automotive, and custom industrial applications. Their extensive Aluminium product
range includes plates, sheets, extrusions, rods, bars, tubes, forge stock, and wire. Their diversified portfolio
features Aluminium alloys from the 1xxx to 7xxx series. In total, they shipped over 0.5 MT of downstream and
value-added products to customers across various sectors.
3.5 Demand Analysis: Growth Drivers and Consumption
Pattern across Downstream Product Segment, Key
Sectors and Regions
Aluminium ranks 2nd in terms of metal consumption worldwide. However, the demand for Aluminium is 1/18th
that of steel. Although the consumption of Aluminium is way behind that of steel, it still is way ahead of other
metals in consumption.
Steel 1,763
Aluminium 97.8
Copper 25.9
Zinc 14
Lead 12
Nickel 3.1
Figure 31: Global Metal Consumption, 2023 (MT)47,48,49,50
Globally, Aluminium consumption has grown at a CAGR of 4.3% from 46 MT in 2005 to 98 MT in 2023. In
2023, primary and secondary Aluminium contributed to 71% and 29% of the global demand, respectively.
Aluminium Growth drivers in the Current World
The ubiquity of Aluminium makes it an essential commodity for almost all the sectors. The global consumption
of Aluminium has seen a significant rise across various sectors. Leading this growth is the automotive sector,
where technological advancements, including the development of electric and lightweight vehicles, have
47 https://worldsteel.org/media/press-releases/2024/world-steel-in-figures-2024-now-available/
48 Al Circle
49 https://www.iea.org/data-and-statistics/data-tools/critical-minerals-data-explorer
50 Industry Sources
Vision Document on Aluminium Metal for India 59driven a substantial increase in Aluminium demand. The increased focus on sustainability is driving the
demand growth for Aluminium across various sectors. Some key factors contributing to this trend are:
• Recyclability: In recent years, propelled by environmental concerns, rising demand, and technological
advancements, the secondary Aluminium market is gaining traction. Its sustainability, requiring just 5%
of the energy needed to produce virgin Aluminium, positions it as a key player in combating climate
change. This, combined with growing demand in sectors like transportation, construction, and packaging,
creates a positive feedback loop. Investments in enhanced sorting and processing technologies broaden
its applicability, making recycled Aluminium increasingly appealing. Supportive government policies and
heightened consumer awareness further accelerate this trend, while cost-effectiveness in certain cases
adds to its allure. These factors collectively boost collection rates, diversify applications, and promote
tighter circular economy models. With ongoing research and development, the future of secondary
Aluminium looks promising, heralding a more sustainable and resource-efficient global economy51.
• Decarbonization: Many industries are moving towards low-carbon solutions, and Aluminium production
is increasingly using renewable energy sources like hydroelectric power to reduce greenhouse gas
emissions. Technological advancements are making Aluminium production more energy efficient.
Innovations such as inert anode technology are being developed to further cut emissions during the
smelting process. Some Aluminium producers are also exploring carbon capture and storage (CCS)
technologies to safely capture and store CO2 emissions from the production process. Supportive
government policies and regulations are driving the shift towards low-carbon Aluminium production, with
incentives, subsidies, and carbon pricing mechanisms encouraging the adoption of renewable energy
sources. This transition aligns with the global decarbonization goals of both producers and consumers.
By adopting these low-carbon solutions, the Aluminium industry is making significant progress towards a
more sustainable and environmentally friendly future, benefiting both producers and consumers and
contributing to the global fight against climate change.
• Transportation: Aluminium is widely used in the automotive industry to reduce vehicle weight. Lighter
vehicles consume less energy, resulting in better fuel efficiency and lower emissions. The increasing
production of electric vehicles has further driven the demand for Aluminium. Lightweight materials like
Aluminium are crucial for enhancing the energy efficiency of EVs, extending battery life, and increasing
the vehicle’s range per charge. In the aerospace sector, Aluminium is prized for its high strength-to-weight
ratio, essential for building strong yet lightweight aircraft, which improves performance and fuel efficiency.
The development of advanced Aluminium alloys has further improved the material’s properties, making
it even more suitable for transportation. These alloys offer enhanced strength, durability, and corrosion
resistance. All these factors contribute to a shift towards using Aluminium, benefiting both the
environment and the economy.
• Renewable Energy: Aluminium is crucial in the renewable energy sector due to its lightweight and
durable properties. It is extensively used in solar panels for structural support and reflective surfaces,
enhancing efficiency. In wind turbines, Aluminium is used in components like nacelles and rotor blades,
reducing weight and improving performance. Its corrosion resistance is vital for offshore installations.
Aluminium’s excellent conductivity and cost-effectiveness make it ideal for electrical transmission lines,
essential for expanding renewable energy generation. Its recyclability supports sustainability and the
circular economy. The growing demand for renewable energy drives the need for Aluminium, with ongoing
innovations further enhancing its role in this sector, benefiting both the environment and the economy.
• Sustainable Packaging: The packaging industry is increasingly adopting more sustainable solutions.
Aluminium is at the forefront of the packaging industry’s shift towards sustainability due to its infinite
recyclability. Its excellent barrier properties and durability help maintain product quality and reduce waste.
Widely used in beverage cans for its lightweight and recyclable nature, Aluminium is also favored in food
packaging for its versatility and safety. Growing consumer demand for sustainable solutions and
51 Al Circle
Vision Document on Aluminium Metal for India 60regulatory pressures are driving its adoption. Economically, Aluminium’s recyclability and durability offer
long-term cost savings and enhance brand image, making it an ideal choice for sustainable packaging.
• Construction: The construction sector is increasingly adopting sustainable practices, with Aluminium
playing a pivotal role due to its strength, durability, and corrosion resistance. Widely used in structural
components like beams and frames, Aluminium ensures long-lasting structures, reducing the need for
frequent repairs. Its natural resistance to corrosion makes it ideal for harsh weather conditions, lowering
maintenance costs and environmental impact. Rapid urbanization and infrastructure development in Asia,
especially in China and India, are driving Aluminium demand for skyscrapers, bridges, and public
transport. Aluminium’s recyclability and energy efficiency support sustainable urban environments, while
its design flexibility and energy efficiency make it a favorite for eco-friendly buildings. The use of recycled
Aluminium contributes to green building certifications and economic benefits, including job creation in
production and recycling industries.
Product wise Aluminium Consumption Trend52 53
Global
Consumption, 2023
Extrusions 5.0%
97.8 MT
5%
8%
2% FRP 3.8%
9%
32%
28%
Global Castings 3.5%
Consumption,
23% 26%
2005
46 MT Wire Rod 4.0%
Others 9.0%
35%
32%
Total 4.3%
Extrusions FRP Castings Wire Rod Others
Figure 32: Product wise Aluminium Consumption (MT) Figure 33: Product wise Aluminium Consumption
Growth CAGR (2005 – 2023), (%)
Global consumption is dominated by rolled products, extrusions and casting which together account for ~87%
of the total demand in 2023. From 2005 to 2023, overall Aluminium consumption grew at a CAGR of 4.3%.
Extrusions registered the fastest growth (5% CAGR), followed by wire rod, castings and FRP.
52 Industry sources
53 Aluminium Industry Outlook, Al Circle
Vision Document on Aluminium Metal for India 61Sector wise Aluminium Consumption54
23% 12% 25% 8% 11% 6% 15%
Transportation Electrical Construction Packaging Machinery/Equipment Cons. Durables Others
Figure 34: Sectoral share of Global Aluminium demand (2020)
3.2
2.9 2.3
3.3
4.6
5.2
11.8
119.5
86.2
2020 (Base) Transportation Electrical Building and Packaging Machinery/ Consumer Others 2030 (Projected)
Construction Equipment Durables
Figure 35: Sector wise Consumption forecast on Aluminium (2020 vs 2030)
Decarbonization policies and the shift towards sustainability are set to significantly impact Aluminium demand.
The rise of renewable energy, electric vehicles (EVs), and sustainable solutions in packaging and construction
will create major opportunities for the Aluminium industry. Aluminium consumption is projected to increase
from 86.2 MT in 2020 to 119.5 MT by 2030, a growth of 33.3 MT.
Approximately 75% of this demand growth will come from the transportation (35%), electrical (16%),
construction (14%), and packaging (10%) sectors. The transportation sector will see increased Aluminium
demand due to the shift towards EVs. The electrical sector will drive demand through the expansion of
renewable energy and power grids. Although the construction sector's move towards sustainability has had
limited success, it still contributes to Aluminium demand. The packaging sector will benefit from Aluminium's
high recyclability and the growing popularity of circular economy policies.
Demand Scenario across major Aluminium Consuming Regions
China
China has been the largest consumer of Aluminium for over a decade. It accounts for more than half of the
global demand. The broad range of end-use applications positions Aluminium demand favorably for future
growth. By 2030, China’s Aluminium demand is projected to increase by ~12 MT from 2020 levels. A
significant portion of this growth, over one-third, is expected to come from the transportation sector, driven by
the rapid adoption of electric vehicles (EVs). In the electrical sector, the expansion of renewable energy
installations in remote areas and the subsequent power transmission projects will contribute to more than
one-fifth of the increased Aluminium demand. The shift away from physical infrastructure and heavy industry
is anticipated to result in slower growth in Aluminium demand from the construction and machinery &
54 Opportunities for Aluminium in a post-Covid economy, CRU, 2022
Vision Document on Aluminium Metal for India 62equipment sectors. Although packaging will remain the smallest end-use sector in China, it is expected to
experience the fastest relative growth among all sectors, primarily due to the shift from glass to canned beers.
14.2
13.3
11
7.1 6.9 7.3 7.2
6
5.3 4.9
1.3 2.1 2.7 3.8 3.1 3.5
Transportation Construction Packaging Foil Electrical Cons. Durables M&E Other
2020 2030
Figure 36: China’s Aluminium Demand, Million Tonnes, 2020 Vs 2030
Asia ex-China
India, Japan, South Korea and Middle Eastern countries like Bahrain are key consumers of Aluminium in the
region and are anticipated to drive Aluminium demand growth. The region is projected to have the fastest
growth in Aluminium consumption, growing at 4.8% CAGR from 2020 to 2030. This growth in demand will
primarily be driven by the transportation, construction, and electrical sectors, which together are expected to
account for nearly 70% of the region’s consumption growth over the next decade. In India, the increase in
Aluminium demand will be largely fueled by population growth, urbanization trends, government focus on
infrastructure development, the transition to renewable energy sources, and the adoption of electric vehicles
(EVs). In Japan and South Korea, the rise in Aluminium consumption will be significant due to the country’s
auto manufacturing industry, which are among the top 5 auto manufacturers. In the Middle East, the growth
in Aluminium demand will mainly be driven by the construction sector and efforts to develop the downstream
Aluminium sector.
6
5
4.2
3.8
3
2.5
2.1 2
1.4 0.7 0.9 0.8 1.5 1.2 1 1.3
Transportation Construction Packaging Foil Electrical Cons. Durables M&E Other
2020 2030
Figure 37: Asia ex-China’s Aluminium Demand, Million Tonnes, 2020 Vs 2030
Europe
European countries like Germany, France, Spain, and Italy are major centers for Aluminium consumption in
the region. The high demand for Aluminium is primarily due to the developed automobile sector, which
accounted for 33% of the region’s total demand in 2020. The transportation sector is expected to remain the
Vision Document on Aluminium Metal for India 63main driver of Aluminium demand, with its share increasing to 37% by 2030. Aluminium demand from the
automobile and electrical sectors will be bolstered by the EU’s climate strategy, which aims for nearly one-
third of energy to come from renewables by 2030 and net-zero greenhouse gas emissions by 2050. Policies
like the European Green Deal is expected to encourage a shift from high-carbon to low-carbon Aluminium
consumption but will not significantly impact Aluminium demand in the region.
6.5
4.2
3
2.3
2 2
1.7
1.4 1.5 1.3
0.9 1 0.6 0.7 0.5 0.6
Transportation Construction Packaging Foil Electrical Cons. Durables M&E Other
2020 2030
Figure 38: Europe’s Aluminium Demand, Million Tonnes, 2020 Vs 2030
North America
Similar to Europe, North America’s transportation sector accounted for the largest share of Aluminium
consumption in 2020, representing 37% of the region’s demand. Due to its consumer-driven economy, North
America is unique among developed regions in that the Aluminium demand from the Packaging sector is
more than the Construction sector. The region’s Aluminium demand is projected to reach 16.6 MT by 2030,
from 11.5 MT consumed in 2020. Similar to Europe, 49% of this growth is expected to come from the
Transportation sector alone, as the region becomes a key EV production market.
6.7
4.2
3
2.3 2.2
1.7
0.5 0.7 1 1.3 0.6 0.8 1 1.4 0.3 0.4
Transportation Construction Packaging Foil Electrical Cons. Durables M&E Other
2020 2030
Figure 39: North America’s Aluminium Demand, Million Tonnes, 2020 Vs 2030
Overall, the global Aluminium demand is expected to grow in both short-term and long-term owing to
the global focus on climate change and Aluminium’s significant role in achieving net-zero.
Vision Document on Aluminium Metal for India 644. Aluminium and India
Vision Document on Aluminium Metal for India 654 Aluminium and India
The Indian Aluminium industry is advancing rapidly, expanding in both primary and secondary metal
production and downstream sectors. With ongoing economic growth, the demand of Aluminium is expected
to rise significantly. The downstream processing industry in India is poised for remarkable progress in the
coming years, driven by the growth in Aluminium consumption through value-added products. Aluminium
consumption in India has increased from 3.20 MT in FY16 to 4.95 MT in FY24. However, per capita Aluminium
consumption in India remains at 3.5 Kg (FY24), compared to the global average of 12 kg and 28 kg in China31.
There is substantial potential for increasing Aluminium consumption due to government initiatives such as
Make in India, Smart Cities, Housing for All, rural electrification, freight corridors, bullet trains, power to every
household, energy-efficient/electric automobiles, Aluminium wagons, and more. Aluminium is set to play a
crucial role in India’s industrial development, serving as a fundamental input for various industries and as a
strategic metal.
In everyday life, Aluminium is found in numerous applications, from household utensils to space vehicles.
Modern engineering demands materials that are lightweight, strong, corrosion-resistant, and aesthetically
pleasing. Aluminium, with its unique properties, meets these requirements, making it an ideal choice for many
applications. It can be alloyed with copper, magnesium, zinc, silicon, manganese, and more to create various
cast, rolled, extruded, forged, and drawn products.
4.1 Current Scenario on Aluminium Demand, Production,
Export and Import
Production55
India’s Aluminium industry is experiencing an upward trajectory, positioning the country as the world’s
second-largest primary producer and third-largest consumer of Aluminium56. Domestic primary Aluminium
production has grown at a CAGR of ~7% from FY16 onwards till FY24. Meanwhile, total domestic
consumption of Aluminium has been growing at a CAGR of ~5.6% from FY16 to FY2457 with primary
Aluminium demand growing at a CAGR of just ~2%.
4.9
4.5
4.0 4.0 3.9 4.1 4.2
3.6 3.7 3.6 3.7 3.6
3.2 3.3 3.4 3.4
2.9
2.4
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Primary Al Production (MT) Domestic Al consumption (MT)
Figure 40: India's production of primary Aluminium and consumption of Aluminium (MT)
On the other hand, the demand for secondary Aluminium has surpassed the growth rate of primary
Aluminium, achieving a CAGR of ~10.7%, rising from 0.85 MT in FY16 to 1.73 MT in FY23. The better cost
economics and environmental advantages of secondary Aluminium have enabled it to secure nearly 39% of
55 Indian Minerals Yearbook 2022, Indian Bureau of Mines
56 India: Aluminium sector surging in India, but hampered by labour shortages: Hindalco exec - The Economic Times (indiatimes.com)
57 Industry Sources
Vision Document on Aluminium Metal for India 66the domestic Aluminium market, marking a 12% increase from FY16 levels.
1.81
1.73
1.66
1.35 1.34 1.37
1.11
0.92
0.85
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Figure 41: India’s Secondary Aluminium Consumption Trend (MT)58
Despite the global market’s slow recovery in 2023, India’s Aluminium demand remained robust, setting it
apart from the rest of the world. This growth is largely driven by government initiatives like “Make in India,”
which have boosted Aluminium demand in sectors such as power and construction. Significant investments
in infrastructure, including railways and airports, along with the booming housing construction and automotive
industries, are key factors contributing to this increased demand. The country’s thriving Aluminium sector
underscores its potential transition from a growing economy to a major global player.
Trade Structure of Indian Aluminium Industry59
In India, both exports and imports have been rising rapidly over the past few years, as illustrated in the figure
below. From 2014 to 2023, exports grew at a CAGR of 12%, while imports have increased at a CAGR of 7%.
3.2
3.0
2.8
2.5 2.6
2.4 2.4 2.3
2.3
2.2
1.9 1.9 1.9
1.7
1.7
1.5 1.6
1.3
1.1
0.9
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Import Export
Figure 42: India’s Trade of Aluminium and Articles Thereof, MT (HS Code:76)
As imports are also increasing, it is necessary to specify the group of products that have contributed to this
growth. HS codes of the 76 group are segregated at the 4-digit level for the analysis, where 7601 is in the
category of unwrought primary Aluminium sector, 7602 is Aluminium waste and scrap, and HS codes from
7603 to 7616 are in the category of downstream Aluminium sector.
58 Al Circle
59 ITC Trademap, last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 67We can observe the trend and share of imports of primary and downstream sectors in the figure below.
According to ITC Trademap data, imports of the primary Aluminium sector corresponding to HS code 7601
were 0.34 MT in 2014, which decreased to 0.26 MT in 2022, representing a drop of 25%. On the other hand,
for the same period, imports of downstream Aluminium products have been steadily growing from 0.34 MT in
2014 to 0.53 MT in 2022, increasing by 53% despite the decrease in 2020 due to COVID-19 lockdowns and
disruptions. It is noteworthy that imports of primary Aluminium decreased, while those of the downstream
sector have experienced an increasing trend, as the share of downstream Aluminium products imports has
increased quite rapidly.
0.39 0.64 0.56
0.39 0.44
0.57
0.34 0.53
0.46
0.39
0.44
0.34 0.39 0.38 0.33 0.36
0.27 0.24 0.24 0.26
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Primary Downstream
Figure 43: India's import of primary and downstream Aluminium (MT)
Additionally, we can see that the import of waste and scrap has been increasing, resulting in scrap being the
largest component in the import of Aluminium and its articles. The import of scrap is mainly from the USA,
UK, UAE, Saudi Arabia, etc. India’s import duty on Aluminium scrap stands at a mere 2.5%, which is
significantly lower than the 7.5% levied on primary Aluminium. This tariff disparity, creating significant price
undercutting in recycled Aluminium production, is a driving factor for the uptick in the import of scrap.
Due to the increase in scrap import, the ratio of total import of Aluminium to Domestic sales increased from
~40:60 in FY 12 to 60:40 in FY 22. Aluminium imports cater to ~60% of domestic demand, growing at a CAGR
of 9% in the last decade (FY 11 to FY 23). India’s Aluminium share through scrap route has increased with a
CAGR of 11% from 0.47 MT in FY 11 to 1.73 MT in FY 23 years due to policy measure taken by other
importing countries like China & Malaysia to restrict metal scrap imports into their respective nations.60
60 Import Export databank, Ministry of Commerce and Industry, Govt. of India
Vision Document on Aluminium Metal for India 686.00 70%
61% 60%
57% 58% 58% 57%
5.00 52% 52% 53% 54% 55% 60% n o
49%
it
p
46% 50% m
T
M 4.00 42% u
s
n n
i
y
40% o
c
t it 3.00 t s
n n
a
u
30% ia
Q g
2.00 a
20% t r
o
p
m
1.00 10% i
f
o
%
0.00 0%
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Primary Aluminium import Scrap import
Downstream products import Domestic aluminium consumption
Market share: Total import
Figure 44: Share of imports of Aluminium in domestic consumption
India exported approximately 72% of its primary Aluminium production in FY22. According to ITC Trademap
data, imports of primary Aluminium (HS code 7601) were 0.35 MT in 2014, which decreased to 0.26 MT in
2022, representing a 25% drop. However, during the same period, India’s primary Aluminium exports more
than quadrupled, rising from 0.6 MT in 2014 to 2.4 MT in 2022. In 2023, India exported Aluminium and
Aluminium products worth USD 7.3 bn, out of which USD 4.8 bn or 65% was unwrought or primary Aluminium
and 35% were downstream Aluminium products.
0.010
0.009
0.51
0.52 0.008
0.006 0.005
0.27 0.61
0.40
0.006
0.005
0.34
0.004
0.005 0.32 2.67
2.45
0.005 0.33 2.14
0.31 1.96 1.96
0.35 1.52
1.24
0.97
0.78
0.59
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Primary Downstream Waste and scrap
Figure 45: Sectoral Share in India’s Export of Aluminium and its products (MT)
Primary Aluminium is mainly exported to Malaysia, South Korea, Japan, Mexico, and the Netherlands. In
2023, Malaysia accounted for around 23% of India’s overall primary Aluminium exports, followed by South
Korea (17%) Japan (9%) and Mexico (7%). Malaysia was also the largest exporter of unwrought Aluminium
to India, but it was much lower compared to its import from India. In 2023, India imported 0.36 MT of Primary
Aluminium, of which the top 10 countries accounted for 93% of the total imports with Middle East Countries
alone accounting for 61%.
Vision Document on Aluminium Metal for India 69Figure 46: India’s Trade of Unwrought Aluminium, 2023 (HS Code: 7601)
On the other hand, imports of the downstream Aluminium products since 2014 have been steadily growing
from 0.34 MT in 2014 to up to 0.56 MT in 2023, increasing up to 64% despite the decrease in 2020 due to
covid-19 lockdowns and disruptions. It is noteworthy that imports of the primary Aluminium decreased, and
the share of downstream Aluminium products imports have increased quite fast.
4.2 Raw Material Scenario – Alumina and Bauxite: Capacity,
Production, Export and Import61,62
4.2.1 Bauxite
Bauxite Reserves
India is the eighth largest country in terms of Bauxite reserves and is naturally endowed with large deposits
of gibbsitic Bauxite63. Bauxite is primarily used for the production of Alumina. Other than that, it is also used
in refractories, abrasives, chemicals, aluminous cements, and miscellaneous products like proppants.
Bauxite ore reserves in India are limited, and their quality is deteriorating over time. Additionally, government
norms are likely to change to include low-grade materials as Bauxite ores. The globally accepted terminology
for classifying Bauxite reserves into high and low grade is based on the ratio of Total Alumina to Total Silica
content in the Bauxite sample, also known as the A/S ratio. High-grade Bauxites have an A/S ratio greater
than 10, while Bauxites with an A/S ratio less than 10 are classified as low-grade ores.
Only 646 MT (13%) Bauxite are under (proved & probable) category and balance 4,312 MT are yet to be fully
explored out of 4958 MT Bauxite resources55. Traditionally, Bauxite reserves in India are mainly concentrated
in the Western Ghats, Central, and Eastern Ghats regions, with significant differences in quality regarding
SiO content and Al O content. India possesses substantial quantities of metallurgical grade Bauxite
2 2 3
(approximately 76% of total resources), primarily located in five states: Odisha, Maharashtra, Jharkhand,
Chhattisgarh, and Gujarat. Resources of cement, chemical, refractory, and abrasive grade Bauxite are limited
and mainly found in Gujarat, Jharkhand, Madhya Pradesh, and Maharashtra. The East Coast is a prime area
with high (Tri Hydrated Alumina) Bauxite.
61 Indian Minerals Yearbook 2022, Indian Bureau of Mines
62 ITC Trademap, last accessed on 10-Aug-2024
63 Draft Strategy on Aluminium Resource Efficiency, NITI Aayog, December 2018
Vision Document on Aluminium Metal for India 70Figure 47: Bauxite Resource Distribution in India
Odisha holds the largest share of Bauxite reserves and resources in India, with over 63% of the total reserves
and 41% of the total resources. While the Resource to Reserve conversion rate is minimal in Andhra Pradesh
(0%) and Chhattisgarh (2%), it is relatively higher in Gujarat (25%) and Odisha (20%). Despite this, the
conversion rates remain low, indicating significant potential for India to enhance exploration activities and
expand its reserve base.
Total 4%
4%
Resources 5%
3%2%
4.96 BnT 6% 6%
Odisha
6%
Chhattisgarh
Total 41% Andhra Pradesh
8%
Gujarat
Reserves
16%
Jharkhand
646 MT Maharashtra
63%
Madhya Pradesh
12% 4%
Others
20%
Figure 48: State wise Bauxite Resource and Reserve Distribution as on 01.04.2020
More than 80% of India’s Bauxite reserves and 75% of resources are of metallurgical grade, an essential raw
material for producing smelter grade Alumina and ultimately Aluminium. This provides an edge over many
countries, as it has a large resource base to support the development of Aluminium industry in India.
Vision Document on Aluminium Metal for India 71Total
Resources 7%
3%
4.96 BnT
3%
4%
7%
1%
4% Metallurgical Grade
11%
Low Grade
Total
Reserves
Metallurgical mixed
646 MT
Refractory
Others
84%
76%
Figure 49: Grade wise Bauxite Reserve and Resource distribution, on 01.04.2020
Bauxite Production
Production of Bauxite has been around 22-23 MTPA since FY14 except it reached 28.1 MT in FY16.
According to Indian Bureau of Mines there are reported 226 Bauxite mines in FY24. State of Odisha (17.6
MT) ranks 1st in production of Bauxite and is followed by Jharkhand (2.0 MT), Gujarat (1.6 MT), Maharashtra
(1.0 MT), Chhattisgarh (1.0 MT), and Madhya Pradesh (0.6 MT).
28.12
24.75
23.69 23.84 23.93
22.32 22.49 22.79 22.49
21.83
20.38
17.40 17.59
15.41 15.48 15.57 16.45
10.84 11.99 11.45
9.09
7.64
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Odisha Gujarat Jharkhand Chhattisgarh Maharashtra Madhya Pradesh Others
Figure 50: State Wise Bauxite Production (MT)
Till 2016 India was consuming around 70%-80% of the Bauxite produced domestically, while the rest of the
commodity was being exported. In recent years, due to the rise in the demand of Aluminium in the domestic
markets, the exports have dropped rapidly from 1.7 MT in 2017 to just 0.1 MT in 2023.This increased demand
for Aluminium and in turn Bauxite has led to the rise in the import of Bauxite which has more than doubled
from 1.6 MT in 2014 to 3.8 MT in 2023. More than 95% of India’s Bauxite imports comes from Guinea.
Vision Document on Aluminium Metal for India 727.4
5.3
3.8
3.5
2.9 3.0 3.1
2.1
1.9
1.6 1.5 1.61.7
1.3
1.1
0.9
0.4
0.2 0.2 0.1
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Import Export
Figure 51: India’s Bauxite Trade (HS Code: 260600) (MT)
4.2.2 Alumina
According to the recent USGS report, India ranks 4th in terms of production of Alumina contributing to nearly
5% of the world production. Domestic Alumina plants are owned by the dominant three players of the
Aluminium industry of the country i.e. National Aluminium Company Limited (NALCO), Hindalco Industries
Limited (Hindalco) & Vedanta Limited.
Domestic Alumina production increased at a growth rate of 7.2% CAGR from FY14 to FY24. Most of the
Alumina produced is used for domestic consumption i.e. by the respective companies which manufacture it,
for the manufacturing of Aluminium metal.
7.60
7.33 7.44
6.45 6.67 6.52
6.08 6.12
4.02 4.17
3.78
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Figure 52: Alumina Production in India (MT)
India is a net importer of Alumina. While the imports of Alumina increased at a CAGR of 13% from 0.8 MT in
2014 to 2.5 MT in 2023, exports have increased at a much slower growth rate of 3.8% CAGR. This is mainly
attributed to the increased demand of Alumina (~7 to 8 Million Tonnes) for domestic Aluminium production.
Vision Document on Aluminium Metal for India 732.7
2.5 2.5 2.5
2.4
2.1
2.1
1.9
1.8
1.5
1.4 1.31.4 1.4 1.4 1.4
1.3
1.5
0.9
0.8
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Import Export
Figure 53: India's Trade of Alumina (MT) (HS Code: 281820)
In 2023, India’s imports of Alumina were mainly from Indonesia (41%), Australia (30%), Vietnam (20%), Saudi
Arabia (5%) and China (4%). Exports were mainly to Oman (39%), Russia (23%), United Kingdom (16%),
United Arab Emirates (15%) and China (3%).
Figure 54: India’s Alumina Trade, 2023 (HS Code: 281820)
4.2.3 Aluminium Scrap
India depends on imports for meeting nearly 85%-90% of its scrap requirement. India’s import of Aluminium
scrap has been increasing at a CAGR of 7.9% from 2019 to reach 1.83 MT in 2023. This increase in the
imports is the testament of the country’s historically low consumption of the metal and also the
underdeveloped scrap generation and collection system. India’s export of scrap metal has been negligible
compared to the imports. The top 10 exporters of Aluminium scrap constituted nearly 72% of India’s total
imports with USA (27%) being the largest exporter of the scrap metal to India. European (more than 20%)
and Middle East (more than 17%) countries also export significant volume of Aluminium scrap to India.
Vision Document on Aluminium Metal for India 74Figure 55: India’s Trade of Aluminium Scraps, 2023 (HS Code: 7602)
4.3 Overview of Major Players: Current Capacity and
Production64
The Aluminium sector in India features a diverse range of companies, from fully integrated firms to product
specialists, with both horizontal and vertical extensions. While the secondary Aluminium sector is highly
fragmented due to low entry barriers & capital costs, the capital-intensive primary upstream sector is
dominated by three major players: NALCO, Hindalco, and Vedanta, with a production capacity of 4.2 MT. The
secondary Aluminium sector has nearly 10 medium sized players and more than 150 to 200 small players.
The downstream segment includes over 150 large and mid-sized companies, along with a significantly larger
base of smaller and unorganized players65.
Primary Aluminium Producers
3.74 2.372.37
3.66
2.10 2.12 1.341.33
2.00
1.81
0.460.46
NALCO Hindalco Vedanta* NALCO Hindalco Vedanta
Capacity Production Capacity Production
Figure 56: Indian Companies’ Alumina Capacity and Figure 57: Indian Companies’ Primary Aluminium
Production, FY24 (MT) Capacity and Production, FY24 (MT)
*Vedanta’s current alumina refinery capacity is 3.5 MTPA
64 Companies’ Website, Annual Report and Investor Presentation, last accessed on 10-Aug-2024
65 Need for an Aluminium Policy in India, Niti Aayog 2017
Vision Document on Aluminium Metal for India 75While the primary Aluminium smelter capacity in India has remained mainly constant over the past years, the
smelter’s capacity utilisation has risen from 59% in FY16 to 101% in FY24. This increase in capacity utilisation
is mainly attributed to the growing Aluminium demand in India.
4.5 4.1 4.1 4.1 4.1 4.1 4.2 4.1 4.0 4.14.1 4.14.2 120%
4.0 3.7 3.6 3.6
100%
3.4
3.5 97% 99% 101%
2.9
3.0 90% 89% 87% 80%
2.4 83%
2.5
70% 60%
2.0
59%
1.5 40%
1.0
20%
0.5
0.0 0%
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Capacity of Primary Al Production (MTPA) Primary Al Production (MTPA) Capacity Utilization
Figure 58: Primary Aluminium capacity and production in India (MTPA)
4.3.1 National Aluminium Company Limited (NALCO)
NALCO, a scheduled ‘A’ Navratna CPSE was incorporated in 1981. It is third largest integrated primary
Aluminium producer in India, covering the entire value chain from Bauxite mining to downstream products.
NALCO operates extensive facilities in Odisha, including a 6.83 MTPA Bauxite mine, a 2.1 MTPA Alumina
refinery, a 0.46 MTPA Aluminium smelter, and a 1,200 MW captive power plant as of FY24.
NALCO is the lowest cost producer of Bauxite and Alumina in the World. NALCO also has a competitive
advantage w.r.t alumina due to its backward integration in terms of bauxite mines. It is also the lowest cost
producer of Aluminium in India, giving it a competitive edge across the Aluminium upstream value chain
compared to other domestic producers like Vedanta and Hindalco.
Products: NALCO offers a wide range of products across various categories.
i. Alumina: Calcined Alumina, Alumina Hydrate, and Specialty Hydrates.
ii. Aluminium and Downstream: Standard Ingots, Sow Ingots, T-Ingots, Wire Rods, Billets, and Flat Rolled
Products.
Backward Integration:
i. NALCO collaborated with Gujarat Alkalies & Chemicals Limited (GACL) to set up a 0.27 MTPA Caustic
Soda Plant along with 130 MW Captive Power Plant at Dahej in Gujarat to meet the Caustic Soda
requirement of Alumina Refinery, as a part of raw material securitisation. The plant was commissioned in
May 2022.
ii. Pottangi Bauxite Mine, with a capacity of 3.5 MTPA and reserves of 111 MT, has been reserved in favor
of NALCO by the government. This will help meet the Bauxite requirement for the additional 1 MT Alumina
Refinery currently under expansion.
iii. NALCO has been allocated the Utkal-D and Utkal-E Coal blocks having 175 MT reserves which will
provide raw material security to the existing operational Units at Captive Power Plant (CPP) and future
expansion
Expansion Plans:
i. Refinery: Capacity expansion plan from 2.1 MTPA to 3.1 MTPA (Expected completion by June 2026)
ii. Aluminium smelter: Capacity expansion by 0.5 MTPA by FY30
iii. Downstream:
Vision Document on Aluminium Metal for India 76a. Value-added product portfolio i.e. further capacity addition in FRP, wire rod, Extrusions, casting and
foils etc.
b. It has established a JV named ‘Angul Aluminium Park Private Ltd’ (AAPPL) with Odisha Industrial
Infrastructure Development Corporation (IDCO) to enhance ancillary, upstream, and downstream
products in the Aluminium industry.
4.3.2 Hindalco66,67
Hindalco Industries Limited, the flagship entity of the Aditya Birla Group, ranks among Asia’s largest
integrated primary Aluminium producers. The company boasts a comprehensive presence across the entire
Aluminium value chain, encompassing Bauxite mining, Alumina refining, Aluminium smelting, and
downstream processes such as rolling, extrusions, and recycling. Hindalco has positioned itself as a low-cost
producer of primary Aluminium in its domestic operations and stands as one of the world’s largest producers
of recycled Aluminium through its overseas operations, spearheaded by its subsidiary Novelis. On April 14,
2020, the company closed the acquisition of Aleris through its subsidiary Novelis. Hindalco's acquisition of
Aleris Corporation has made it one of the world's largest Aluminium companies, with 49 advanced
manufacturing facilities across North America, Europe, and Asia.
Hindalco runs captive Bauxite mines in Jharkhand, Chhattisgarh, Maharashtra, and Odisha with a cumulative
EC capacity of 15 MTPA against the current requirement of 10-11 MTPA. The Utkal Alumina refinery in
Odisha is a world-class facility known for its globally competitive cost structure. The company operates
Aluminium smelters with captive power plants in Madhya Pradesh, Uttar Pradesh, and Odisha. Key smelters
include those at Renukoot (Uttar Pradesh), Hirakud and Aditya (Odisha), and Mahan (Madhya Pradesh), of
which Aditya and Mahan smelters employ advanced AP36 technology.
Products: Hindalco’s product portfolio includes:
i. Alumina: Chemical Alumina and hydrates used in industries like water treatment, refractories, and
ceramics
ii. Aluminium and Downstream: Ingots, billets, wire rods, rolled products, extrusions, and foils
Backward Integration:
i. Hindalco has entered into a MoU with OMC to secure a long-term raw material supply for its upcoming
2 MTPA Alumina refinery project.
ii. To ensure long-term raw material security, Hindalco aims to reduce its dependency on external
sources for Coal procurement. It has recently acquired the Chakla and Meenakshi Coal mines, which
have a combined mining capacity of 12.5 MTPA. Apart from this, Hindalco also has three Coal mines-
Meenakshi West, Gare Palma IV/4 (GP-4) and Kathautia. These acquisitions have further
strengthened the Coal supply chain and are expected to drive cost synergies leading to lower cost of
production.
Expansion Plans:
i. Refinery: Capacity expected to surpass 5.8 MT with addition of 2 MTPA refinery Kansariguda,
Rayagada district by FY27.
ii. Aluminium smelter: Capacity expansion up to 1.5 MTPA by FY27.
iii. Downstream:
a. To enrich its downstream products portfolio and to expand this business, Hindalco has allocated
around USD 0.68 billion towards domestic capex to enhance domestic downstream Aluminium
capacity by ~39% to over 0.6 MT by FY26.
66 Hindalco Industries – Capacity expansion, sizing downstream to drive margins, Anand Rathi Research
67 Hindalco-Novelis completes acquisition of Aleris
Vision Document on Aluminium Metal for India 77b. Hindalco has established an India’s first automated robotics plant in Chakan, Pune, Maharashtra,
to manufacture battery enclosures for the EV segment having an annual capacity of 164,000 units.
c. To meet the demand of Aluminium battery foil in India, primarily due to the exponential growth of
gigafactories involved in advanced cell manufacturing Hindalco has allocated ₹800 crore to
establish a new plant near Jharsuguda in Odisha. Initially, this facility will produce 25,000 MT of
Aluminium battery foil, essential for both Lithium-ion and Sodium-ion cells.
d. Hindalco has planned a CAPEX of USD ~ 5 billion to enhance Novelis’ FRP capacity by ~21% to
over 4.9 MT and recycling capacity by ~33% to 2.9 MT.
4.3.3 Vedanta
Vedanta is a major player in the global Aluminium industry and the largest producer of Aluminium in India.
The company has a comprehensive presence across the Aluminium value chain, from Alumina refining to
Aluminium smelting and downstream value-added products. The Company has also recently acquired bauxite
mines to become an integrated Aluminium producer.
Vedanta meets its Bauxite requirement through imports and domestic procurement and its Alumina refinery
and Aluminium smelter capacity stands at 3.50 MT and 2.37 MT, respectively making it the largest primary
Aluminium player in the country and 8th largest in the world. Vedanta operates some of the largest Aluminium
smelters in the world. The Jharsuguda smelter in Odisha has a capacity of 1.8 MTPA, making it one of the
largest single-location Aluminium smelters globally. Additionally, the Bharat Aluminium Company (BALCO)
in Korba, Chhattisgarh, has a smelting capacity of 0.57 MTPA. Together, these facilities contribute
significantly to Vedanta’s total Aluminium production capacity of 2.37 MTPA
Products: Vedanta’s product portfolio includes:
i. Aluminium and Downstream: Ingots, billets, wire rods, Rolled products, and alloys.
ii. Specialty Products: Low carbon ‘green’ Aluminium product branded as “Restora”, which is used in
sectors like automotive and aerospace.
The refinery has recently expanded its capacity to 3.5 MTPA and plans to further increase it to 5 MTPA. This
expansion is part of Vedanta’s strategy to achieve 100% vertical integration and reduce dependency on
external sources for Alumina.
Backward Integration: Vedanta has planned for 100% backward and forward integration to fulfil the
requirement of its Alumina refinery and Aluminium smelter:
i. Vedanta won Sijimali Bauxite mine having 300 MT resource and mining capacity of 12 MT. This will
be capable to supply nearly 67% of the future Bauxite demand of Vedanta’s Aluminium refinery. The
remaining Bauxite requirement shall be sourced from OMC/other miners.
ii. Vedanta has recently acquired 5 Coal mines with a total resource of 950 MT and mining capacity of
40 MTPA to ensure uninterrupted and low-cost power supply for its Aluminium operations.
Expansion Plans:
i. Refinery: Vedanta has planned to increase its Alumina refinery capacity to 5 MTPA by 2025 and 6
MTPA by 2026.
ii. Aluminium smelter: Vedanta aims to achieve 3.1 MTPA Aluminium smelter capacity post expansion.
iii. Downstream:
a. In the downstream sector Vedanta has set a target to achieve 2.5 MT downstream/value added
products production capacity from current levels of 1.4 MT.
b. Vedanta, in collaboration with the Odisha Industrial Infrastructure Development Corporation
(IDCO), is setting up a state-of-the-art Aluminium Park near its smelter in Jharsuguda, Odisha.
Inaugurated in December 2022, this park aims to attract downstream industries by offering direct
access to hot metal (molten Aluminium) from Vedanta’s smelter.
Vision Document on Aluminium Metal for India 78Secondary Aluminium Producers68,69
While the primary Aluminium market is dominated by only three players, the secondary Aluminium industry
is highly fragmented and divided into small and medium players, and large players, with the latter having an
annual capacity of 40,000 tonnes or more. The recycling market relies heavily on small and medium players,
who cater to 55-60% of the total market demand. The large players, characterised by superior economies of
scale, an extensive client base, mechanized operations, technological advancements, and enhanced
productivity, contribute the remaining 40-45%.
Large players, such as CMR Group, Daiki Aluminium, and Sunalco, have a diversified geographical presence
with multiple plants, allowing them to mitigate regional demand fluctuations and potentially achieve better
growth. These large players are notably present in key automotive clusters.
CMR Group is a major player in the recycling segment, along with Daiki Aluminium, Sunalco, and Namo
Alloys. Aluminium scrap recovery is mainly handled by small and medium enterprises, serving the utensil and
casting industries.
~10%
40-45% 20-25% 45-50%
50-55%
20-25%
Small & Medium players Large Players North West South East
Figure 59: Capacity distribution of Secondary Figure 60: Region wise distribution of installed
Aluminium based on Players (for FY 21) secondary capacity in India
Table 5: Leading Secondary Aluminium players in India
# Leading Secondary Aluminium Players Capacity (kTPA)
1. CMR Green Technologies 382
2. Sunalco 75-100
3. Daiki Aluminium Industry India Pvt Ltd. 70-110
4. IMAC Alloy Casting 30-50
5. Sree Sumangala Metals 30-40
6. SBA 30-90
7. GR Metalloys 25-40
68 Source: Aluminium recycling in India, February 2022, CRISIL
69 Industry sources
Vision Document on Aluminium Metal for India 79# Leading Secondary Aluminium Players Capacity (kTPA)
8. Century NF 50-70
Secondary Aluminium production capacity in India is expected to grow from ~2 MT in FY24 to 3.5 MT
by FY30. CMR plans to add 100 kTPA, to increase its capacity to 482 kTPA by FY26. Other players
such as Namo and Samyak are expected to add 8.4 kTPA, 30 kTPA, respectively.
Northern India holds 45-50% of the country's secondary Aluminium recycling capacity, primarily due to
its proximity to the National Capital Region (NCR) auto cluster with key OEMs such as Hero Motocorp,
Maruti Suzuki, Tata Motors, Bajaj Auto, etc. located in the region. The western and southern regions
each account for 20-25% of the capacity, serving the automotive, building & construction, and consumer
durables industries. The eastern region, with about 10% of the capacity, mainly caters to the deoxidizer
segment and utensil manufacturing.
4.4 Downstream and Value-Added Products70
1.26
1.16 1.15 1.17
0.99 1.01
0.54 0.50 0.52 0.50 0.53
0.43
0.11
0.06 0.07
Extrusions FRP Castings Wire Rod Foil
FY19 FY20 FY21
Figure 61: India’s Production of Downstream Products (MT)
India’s downstream Aluminium production capacity stood at 3.9 MT in 202071 and needs to more than
double by FY30 and grow nearly tenfold by FY47 to achieve India’s aim of self-reliance in the Aluminium
sector. The most consumed and produced downstream products in India are Aluminium castings and
wire rods, followed by FRP and extrusions. Due to the impact of COVID-19, the consumption and
production of downstream products in FY20 and FY21 decreased from FY19 levels. However, with the
recovery of the Indian economy, the demand for Aluminium products has picked up again. Currently,
Aluminium demand stands at 4.95 MT in FY24.
70 Al Circle
71 https://www.entrepreneur.com/en-in/growth-strategies/how-downstream-Aluminium-can-facilitate-the-way-for/359560
Vision Document on Aluminium Metal for India 801.4
1.3
1.2
1.1
1.1
1.0 1.0
0.9 0.9
0.6 0.6
0.5
0.3 0.3 0.3
0.2 0.2
0.1
Extrusions FRP Castings Wire Rod Foil Others
FY22 FY23 FY24
Figure 62: India’s Consumption of Downstream Products (MT)
In India, extrusions find their application mainly in the building and construction, transportation and
electrical and electronics sector. While castings are mostly in the transportation sector, FRP and foils
are majorly consumed in the packaging industry. FRP also finds its application in the automotive,
electrical & electronics and consumer durables industry. On the wire rods is almost entirely consumed
in the electrical and electronics sector.
Extrusions 12% 54% 14% 8% 5% 6%
FRP 13% 5% 40% 10% 8% 15% 10%
Castings 78% 7% 9% 6%
Foil 56% 22% 22%
Wire Rod 98% 2%
Transportation Building and Construction Packaging
Electrical & electronics Industrial Consumer durables
Others
Figure 63: Sector wise Consumption of Aluminium Downstream Products, FY2172
Primary producers like Vedanta, Hindalco and NALCO are also major players in the downstream Sector
in India. Other major players include Jindal Aluminium, Century Extrusions, Apar Industries, Manaksia
etc. These companies offer a wide range of Aluminium alloys.
• Jindal’s wide range of alloys (1xxx, 3xxx, 5xxx and 8xxx) are well accepted all across the globe in
diverse alloy combinations for segments such as Aviation, Architectural, Transport, Electronics,
Defence, Solar, Roofing, Cladding, Insulation, Closure stock, Foils etc.
• Hindalco-Almex Aerospace Limited (HAAL), a JV between Hindalco Industries and Almex USA Inc.,
focuses on manufacturing high-strength Aluminium alloys for the aerospace, sporting goods, and
72 Outlook for Indian Aluminium Industry, Al Circle
Vision Document on Aluminium Metal for India 81surface transport industries. Its 12,000 TPA uses state-of-the-art technologies in casting,
homogenizing, machining and ultrasonic testing for manufacturing Aluminium hard alloy billets and
slabs in a wide range of 2xxx, 6xxx and 7xxx alloy series.
• Vedanta also produces different downstream products of different alloys of 1xxx, 3xxx, 4xxx, 5xxx
and 6xxx series. In collaboration with VSSC-ISRO, BALCO has installed a Novelis Casting Station
along with Heat Treatment, Stretching, and Polishing equipment to commercially produce various
grades of aerospace alloys. The alloys produced by BALCO for VSSC include AA2014, AA2219,
AA7075, and AA6063.
• NALCO produces diverse rolled products like sheets and coils of 1xxx, 3xxx, 5xxx and 8xxx series.
• Century also produces different alloys (1xxx to 6xxx and 8xxx series) catering to building and
construction, transmission & distribution sector.
Table 6: Application of different Aluminium Alloy
Aluminium Alloy Applications
Packaging, Building product, Electrical conductors, chemical equipment, and
1xxx
food processing
2xxx Aerospace, Defence, Space and high-performance applications
3xxx Beverage can, Building product
Castings, Cladding on brazen sheet, Welding wire, brazing alloys, and
4xxx
automotive components
5xxx Marine, pressure vessels (LNG carrier) and automotive parts.
6xxx Structural applications, architectural components, and auto structural sheet
General Engineering, Aerospace, sporting equipment, and high-stress
7xxx
components
Auto body sheet, Specialized applications like lithium-containing alloys for
8xxx
aerospace
Table 7: Major Aluminium Downstream Producers in India
Product Segment Major Players
Extrusions Alom Extrusions Ltd.
MAAN Aluminium Ltd.
Jindal Aluminium Ltd.
Hindalco Industries Ltd.
Century Extrusions Ltd.
Valco Industries Ltd.
FRP Hindalco Industries Ltd.
Vision Document on Aluminium Metal for India 82Product Segment Major Players
Vedanta Ltd. (BALCO)
Jindal Aluminium Ltd.
Nalco
Virgo Aluminium Ltd.
Manaksia Aluminium Co. Ltd
Castings Alicon Castalloy Ltd
Ashley Alteams India
Caparo India
Endurance Technologies
Jay Hind Industries Ltd
Minda Industries Ltd
Wire Rod Vedanta Group
Hindalco
Nalco
Gupta Power
Cabcon India
KVJ Alloy Conductors
Apar Industries
Foil Hindalco Industries Ltd
Jindal India Ltd.
PG Foils Ltd
Raviraj foils Ltd.
Paragon Industries
Table 8: Major Aluminium Downstream Producers Capacity73
Producer/Product Annual Installed capacity (Tonnes)
Hindalco Industries Ltd74.
Rolled product 295,000
Extrusions 115,000
Aluminium foils 40,000
Total 450,00
NALCO
73 Indian Mineral Yearbook 2022, IBM
74 386-24 -24 Hindalco Extrusions Brochure Revision, last accessed on 01-Oct-2024
Vision Document on Aluminium Metal for India 83Producer/Product Annual Installed capacity (Tonnes)
Aluminium wire rods 100,000
Aluminium billets 30,000
Rolled products 45,000
Total 175,000
Vedanta75
Primary Foundry Alloy 140,000
Rolled products 45,000
Billets 580,000
AlSi 85,000
Aluminium wire rods 555,000
Total 1,405,000
JINDAL ALUMINIUM LTD76
Extrusions 180,000
Rolled Products 75,000
Total 255,000
India’s Trade of Downstream Products
In 2023, India ranked 12th and 8th in global downstream Aluminium imports and exports, respectively.
More than 2/3rd of the downstream Aluminium imports came from China, with Thailand and South Korea
being the other top 3 exporters to India. USA, Saudi Arabia and UAE were the top 3 export destinations
for India’s downstream products accounting for close to 45% of India’s export.
75 Vedanta Investor Presentation 2024
76 Jindal Aluminium, Nov 2024
Vision Document on Aluminium Metal for India 84Figure 64: India’s Trade of Aluminium Downstream Products (HS Code: 7603 to 7616)
While India is heavily dependent on imports for Aluminium foils, plates, rods and structures, it is one of
the major exporters of Aluminium wire, stranded wire and cables.
188
Total 180 Total
Imports Exports
195
561 kT 612 kT
162
95
58
68 47 44
48 46 42
Wire Standed Plates Articles Foil Others
(7605) Wire, (7606) (7616) (7607)
Foils Plates Articles Structures Rods Others
Cables
(7607) (7606) (7616) (7610) (7604)
(7614)
Figure 65: India’s Product wise Imports of Figure 66: India’s Product wise Exports of
Downstream Aluminium (kT), 2023 Downstream Aluminium (kT), 2023
Vision Document on Aluminium Metal for India 854.5 Aluminium Cost of Production Assessment77
2500
2107
1982 1947 1945
1884
)T 2000 1772
/D 134
S 29
U 65 71
(
n 1500
147
o itc 734 744 493
437
184 607
u
d 293
o
r 1000
P fo 300 369 445 353 313 328
ts
o
C 500
724 659 682 710 708 715
0
China India Russia Middle East Canada Global Average
Average Delivered Alumina Cost Other Raw Materials Cost Energy Cost
Labour Cost Other Costs Depreciation
Figure 67: Cost of Production of Aluminium (USD/T): India vs. Other Countries/Regions
Note: Global Average includes major Aluminium producing countries like China, Russia, Canada and
Middle East Countries top Aluminium smelters cost and excludes Indian Aluminium Smelter’s cost
India has the highest Aluminium production costs among major producers such as China, Russia,
Canada, and Middle Eastern countries like the UAE and Bahrain. The total cost of producing Aluminium
in India is USD 2107 per tonne, while the global average is USD 1945 per tonne, which is 8% lower
than India’s production cost. Alumina and energy cost makes up 55%-75% of the total cost of production
of Aluminium.
The cost of production of Aluminium in India is influenced by several factors, including the cost of raw
materials (such as Bauxite and Alumina), energy costs, labour etc.
• The average delivered Alumina cost in India is USD 659 per tonne of Aluminium, whereas the global
average delivered Alumina cost is USD 715 per tonne of Aluminium. India’s lower average delivered
Alumina cost is mainly because India has positioned itself as the lowest cost producer of Alumina
in the world as the Alumina producers in India have integrated Bauxite mines. On the other hand,
countries like China, Canada and Middle East Countries have significant dependence on imports
for Bauxite sourcing leading to higher Alumina cost for their smelters.
• Power is a critical input for the Aluminium industry, accounting for almost 30% - 40% of the cost of
production globally. The energy cost in India is USD 745 per tonne of Aluminium, whereas globally
it is USD 607 per tonne of Aluminium. While China has the highest energy cost per tonne of
Aluminium produced after India, countries like Canada, Russia, and Middle Eastern nations have
much lower energy costs compared to India, ranging from 30% to 60% of the energy cost of Indian
Aluminium smelters. Canada being the lowest cost Aluminium producer has lowest energy cost of
USD 293 per tonne of Aluminium, accounting for just 17% of the total cost. Canada’s low energy
cost is as a result of the adoption of hydropower for its smelters. Coal subsidies in China, natural
77 Industry Sources
Vision Document on Aluminium Metal for India 86gas subsidies in Russia, and subsidized power in the Middle East and various Aluminium-producing
countries give them a competitive edge over Indian players.
4.6 Primary vs Secondary Aluminium – Present
Scenario78,79
Resource efficiency and a circular economy in the metal industry are crucial for sustainable growth.
With rising demand and consumption, recycling key base metals like Aluminium is increasingly
emphasized. The growth rate of secondary Aluminium has surpassed that of primary Aluminium, driven
by better cost economics compared to primary Aluminium, environmental advantages, and low capital
investment requirements.
Key Advantages of Secondary Aluminium
✓ Lower Capital Intensity: Producing Aluminium through the primary route involves capital and
energy-intensive processes like bauxite mining, refining, and smelting. Establishing a green-field
refinery and smelter of minimum economic size (1 MTPA for a refinery and ~0.5 MTPA for a
smelter) with a captive power plant requires an investment in excess of INR 30,000 Crores
(excluding mines and other associated infrastructure). In contrast, the recycled route, which
includes sorting, melting, re-alloying, and casting scrap into ingots, is significantly less costly due
to lower energy requirements. Setting up a fully mechanized recycling unit with a 1 MTPA capacity
typically requires an investment of INR 1,500-2,000 Crores.
✓ Low Cost of Production Compared to Primary Aluminium: One of the key benefits of recycling
Aluminium is its lower production costs compared to the primary manufacturing route. This cost
advantage is primarily due to the significantly reduced energy requirements for recycling.
Additionally, the presence of necessary alloyed elements in Aluminium scrap further decreases
alloying costs (since it is pre-alloyed to meet specific end-use requirements when in scrap form).
✓ Eco-friendly Alternative: The production of primary Aluminium requires substantial natural
resources. Industry estimates indicate that producing 1 tonne of Aluminium via the primary route
in India consumes 6-7 tonnes of bauxite, 20-22 cubic meters of water, and approximately 14,000
kWh of power. In contrast, manufacturing 1 tonne of Aluminium through recycling uses Aluminium
scrap as the main raw material, conserving natural resources and requiring only 5-7% of the
energy needed for primary Aluminium production, thus being more energy efficient. Additionally,
each tonne of Aluminium ingot produced via the secondary route emits 95% less CO . The primary
2
Aluminium production process also generates significant solid waste, approximately 2-2.5 tonnes
per tonne of Aluminium produced, which negatively impacts the environment. In contrast,
secondary Aluminium production results in minimal solid and liquid waste.
Demand Segregation across Primary and Secondary Aluminium
Although the power sector is the largest consumer of primary Aluminium in India, the more favorable
cost economics of secondary Aluminium and the strong demand for non-ferrous castings from the
automotive sector, which is the biggest user of secondary Aluminium, are the primary drivers of
secondary Aluminium demand in the country. The secondary Aluminium also finds an additional
demand from packaging, consumer durables, and construction sectors.
78 Assessment of secondary Aluminium industry in India, 2022, CRISIL
79 AL Circle
Vision Document on Aluminium Metal for India 8731% 27% 28% 31% 34% 36% 40% 43% 39% 38%
69% 73% 72% 69% 66% 64% 60% 57% 61% 62%
FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY24
Primary Aluminium Secondary Aluminium
Figure 68: Primary and Secondary Aluminium share in domestic Aluminium consumption
Owing to its specific characteristics, usage of primary and secondary Aluminium across different sectors
also varies significantly. While the primary Aluminium dominates the usage in power sector, the share
of secondary Aluminium is very low. On the other hand, secondary Aluminium usage share is higher in
transportation, packaging and construction sector.
The automotive sector consumes 40-45% of secondary Aluminium in India, while the building and
construction sector, which uses 21-22%, has seen increased demand due to the rising use of recycled
extrusions, especially in window frames. The packaging segment also experienced faster growth, driven
by the food, beverage, and pharmaceutical industries.
Primary Aluminium usage Secondary Aluminium usage
1%
8%
7%
20%
21%
8%
6%
7%
55%
8%
15%
44%
Power Building & Construction Power Building & Construction
Auto Packaging Auto Packaging
Consumer Durables Others Consumer Durables Others
Figure 69: Primary Aluminium Usage Distribution Figure 70: Secondary Aluminium Usage Distribution
across end-use Sectors across end-use Sectors
Although the share of secondary Aluminium consumption in India has increased over the years, the
availability of domestic scrap and sourcing scrap from other nations have been challenging. The
Vision Document on Aluminium Metal for India 88industry heavily depends on imports, with scrap imports accounting for 85-90% of raw material needs,
exposing recyclers to risks like currency fluctuations, global scrap price volatility, upfront cash
payments, and longer turnaround times. Additionally, the lack of automation in scrap recycling activities
such as sorting, cleaning, and segregation poses a challenge in setting up large capacity plants. The
industry is labour-intensive and lacks full automation in recycling activities, leading to lower productivity
and quality control compared to larger players. Furthermore, impurities in secondary Aluminium pose
risks to major end-use industries like packaging, automobiles, building and construction, and consumer
durables.
To overcome the challenges facing the domestic Aluminium industry, India needs a collaborative effort
between the industry and the government. Significant investment in scrap collection and processing
infrastructure is essential for sustainable development. Implementing advanced technologies for
sorting, cleaning, and segregating scraps can enhance productivity and quality control. Policies that
encourage the use of recycled Aluminium across various sectors will drive demand, while forming
alliances among recyclers can facilitate the sharing of best practices and pooling of resources.
Additionally, investing in research and development to improve recycling processes and develop new
applications for secondary Aluminium will spur industry growth. Stringent quality control processes are
crucial to minimize impurities in secondary Aluminium, ensuring it meets industry standards.
Organizing the recycling business by integrating scrap collectors, aggregators, and rag pickers
into the formal system is essential. A robust scrap metal recycling industry will significantly
contribute to establishing a circular economy in the Aluminium sector, generating substantial
employment opportunities and aiding in mitigating climate change by adhering to COP21
commitments and achieving sustainable development goals (SDGs).
Vision Document on Aluminium Metal for India 895. Net Zero Pathway for
India’s Aluminium
Sector
Vision Document on Aluminium Metal for India 905 Net-Zero Pathway for India’s Aluminium
Sector
5.1 Sustainability: Global Initiatives and India's
Commitments Towards Climate Change
5.1.1 World’s Climate Change Goals
The collective aim of the world is that greenhouse gas (GHG) emissions need to be reduced by 45% of
its 201080 levels which was 43.44 BnT of CO equivalents81 . In the global scale the goal also is to attain
2
net-zero carbon emissions by 205080.The following are the net-zero emission goals of different
countries of the world.82
Net-zero greenhouse gas
Region 2030 greenhouse gas reduction targets
emission target
USA To reduce the emissions by 50-52% from 2005 The country aims to achieve
levels which was 6,35083 MT of CO equivalents. net-zero greenhouse gas
2
emissions by 2050.
European To reduce emissions by 55% from 1990 levels which The EU aims to achieve net-
Union [EU] was about 4,284 MT of CO equivalents. zero greenhouse gas
2
emissions by 2050.
China The target is to increase the share of non-fossil The country aims to achieve
energy consumption to around 20% by 2030. net-zero greenhouse
emissions by 2060.
Achieve peak CO emissions by 2030.
2
Japan Japan aims to reduce its greenhouse emissions by The country aims to achieve
46% in 2030 from its 2013 levels which was about net-zero greenhouse
1300 MT of CO equivalents. emissions by 2050.
2
Canada Canada aims to reduce its greenhouse emissions The country aims to achieve
by 30% in 2030 from its 2005 levels which was net-zero greenhouse
686.29 MT of CO equivalents. emissions by 2050.
2
South- South Korea aims to reduce its greenhouse The country aims to achieve
Korea emissions by 24.4% in 2030 from its 2017 levels net-zero emissions by 2050.
which was 708.76 MT of CO equivalents.
2
Brazil Brazil aims to reduce its greenhouse emissions by The country aims to achieve
43% from its 2005 levels which was 898.79 MT of net-zero greenhouse
CO equivalents. emissions by 2050.
2
80 Carbon neutrality by 2050: the world’s most urgent mission, António Guterres, 11-Dec-2020, last accessed on 01-Oct-2024
81 Total greenhouse gas emissions (kt of CO2 equivalent) | Data (worldbank.org), last accessed on 01-Oct-2024
82 The Carbon Space Implications of Net Negative Targets, CEEW, Nov-2021, last accessed on 01-Oct-2024
83 Greenhouse gas emissions - Our World in Data, last accessed on 01-Oct-2024
Vision Document on Aluminium Metal for India 915.1.2 India’s Climate Change Goals
India aims to reduce its greenhouse gas emissions intensity by GDP from 2.40 MT of CO / USD billion
2
in 2005 (The GDP of India in 2005 was USD 82084 billion and the greenhouse gas emissions was 197085
MT of CO equivalents) by 45% to 1.32 MT of CO / USD billion in 203086 .India has already managed
2 2
to lower the emissions intensity by GDP by 33% from its 2005 number in 201987. India also aims to
power 50% of its energy from renewable energy sources by 2030. By 2023 India has achieved a
capacity of 43.8% energy from non-fossil energy sources86. India also aims to achieve net-zero
greenhouse gas emissions by 2070.
5.1.3 Aluminium’s role in a Net-Zero World
Aluminium’s unique properties make it an indispensable material in the fight against climate change
and is the key in the transition to a sustainable, low-carbon future. Its versatility and recyclability not
only help reduce emissions but also support sustainable development across various sectors like
transportation, construction, packaging and electrical. In this section, we have highlighted how
Aluminium is contributing to a net-zero world:
Transportation: Due to its lightweight nature, the world is increasingly using Aluminium in the
automotive and aerospace industries. Vehicles made with Aluminium are lighter, which improves fuel
efficiency and reduces greenhouse gas emissions. To achieve its net-zero ambitions, the world’s rapid
transition to EVs has led to increased consumption of Aluminium in the automotive industry, as it also
benefits from Aluminium by helping extend battery life and range.
Construction: The construction industry is at a pivotal moment, facing growing demands for
sustainable practices and materials. In this context, Aluminium stands out as a significant contender,
providing a blend of durability, flexibility, corrosion resistance, and environmental advantages. Along
with other benefits, its thermal and reflective properties contribute to reduced cooling costs and energy
savings when used in windows, doors, roofing, cladding, and facades.
Packaging: Aluminium can be utilized in various packaging formats, such as cans, foils, and pouches.
Its recyclability and flexibility make it an ideal material for the packaging industry, enabling innovative
designs that cater to diverse products and industries. Additionally, recyclable Aluminium packaging
helps reduce the reliance on non-environmentally friendly materials like single-use plastics, promoting
a more sustainable future.
Renewable Energy: Renewable energy sources such as solar, wind, hydro, and geothermal generate
electricity without emitting greenhouse gases, making them crucial in the global push towards a net-
zero world. Aluminium plays a key role in these technologies, being used in the frames of solar panels
and the structures of wind turbines. Its lightweight and strong properties make it perfect for these
applications, aiding in the production of clean energy.
Decarbonising Production: Aluminium is one of the most emission-intensive metals, accounting for
nearly 2% of global man-made emissions. However, given its crucial role in achieving a net-zero world,
there is a pressing need to decarbonize the Aluminium sector. The industry is actively working to reduce
its carbon footprint by transitioning to renewable energy sources for smelting and refining processes,
thereby further contributing to a net-zero future.
84 GDP (current US$) - India | Data (worldbank.org), last accessed on 10-Aug-2024
85 India: CO2 Country Profile - Our World in Data, last accessed on 10-Aug-2024
86 Non-fossil fuel sources account for nearly 44 per cent of India’s total installed electricity generation capacity, PIB Delhi, 06-
Dec-2023, last accessed on 01-Oct-2024
87 Annual Report, FY24, MoEF&CC
Vision Document on Aluminium Metal for India 92To maximize these benefits, collaboration across industries and governments is essential. Policies that
promote recycling, investment in clean technologies, and consumer awareness are all crucial in
leveraging Aluminium’s potential to achieve a net-zero future.
5.1.4 Contribution of Aluminium in Total Greenhouse gas emissions Globally
In 2023, the total greenhouse gas emissions were 52.96 BnT of CO equivalents. The industrial
2
combustion sector in particular emitted 6.45 BnT of CO equivalents. The following is the sector wise
2
breakup of the greenhouse gas emissions.
4%
12%
16%
Agriculture
7%
Buildings
Fuel Exploitation
Industrial Combustion
9%
11%
Power Industry
Processes
Transport
12% Waste
29%
Figure 71: Sector Wise Green House Gas Emissions Worldwide (2023)
In 2023 the greenhouse gas emissions by the Aluminium sector accounted for 2% of the total
greenhouse gas emissions worldwide. The Aluminium sector emitted 1.12 BnT of CO equivalents while
2
the total greenhouse gas emissions was 52.96 BnT of CO equivalents.88
2
2%
GHG emsissions due to Aluminium Sector
GHG emissions due to other factors
98%
Figure 72: Contribution of Aluminium in greenhouse gas emissions worldwide
Note: Aluminium Sector includes All processes from mine (primary route) and end of life product collection (recycling route) to
semis fabrication including ancillary processes, transport and electricity production
88 Greenhouse Gas Emissions – Aluminium Sector - International Aluminium Institute, last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 935.1.5 Contribution of Aluminium in Total Greenhouse gas emissions for India
In the Indian scenario the greenhouse gas emission intensity of the Aluminium sector is 18 tonnes of
CO equivalents/tonne of Aluminium produced in the year 202389. In 2023 India emitted 4.13 BnT of
2
CO equivalents and the industrial combustions had emitted 628.55 MT of CO equivalents90. The total
2 2
GHG emission of Indian aluminium industry was estimated as 82 MT of CO equivalents in 2023.
2
3%
8%
19%
Agriculture
8%
Buildings
Fuel Exploitation
7%
Industrial Combustion
Power Industry
6%
Processes
Transport
34% Waste
15%
Figure 73: Sector wise greenhouse emissions in India (2023)
5.1.6 Greenhouse gas emissions scenario for Aluminium Sector.
In 2023 the greenhouse gas emissions intensity in the Aluminium sector (globally) was 14.8 tonnes of
CO equivalents/ tonne of Aluminium. The following is the historical data of the greenhouse gas
2
emission intensity in the Aluminium sector from 2005-2023.91
18.50
18.00
17.50
17.00
16.50
16.00
15.50
15.00
14.50
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023
Figure 74: Greenhouse gas emission intensity in the Aluminium sector (worldwide)
89 https://jmkresearch.com/wp-content/uploads/2025/04/Green-Power-Procurement-by-Aluminium-Sector-in-India_JMK-
Research.pdf
90 EDGAR - The Emissions Database for Global Atmospheric Research
91 Greenhouse Gas Emissions – Aluminium Sector - International Aluminium Institute, last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 94Greenhouse gas emission intensity growth in the Aluminium Sector
Future projections of greenhouse emission intensity in the Aluminium sector assumes two scenarios.
The first scenario is the 2050 net-zero emissions scenario which would result from decarbonization
efforts such as applying inert anode technologies, using carbon capture storage technologies, switching
to renewable energy sources for electricity generation etc. The second scenario is the 2050 Business
as usual (BAU) scenario which assumes no significant decarbonization initiatives.92
20
18
16
17.4
16.9
14 16.1 16
12
11.5
10
8
6
4
2.2
2
0.5
0
2021 2030 2040 2050
Emission Intensity of Aluminium (2050 Net-Zero scenario) Emission Intensity of Aluminium (2050 BAU Scenario)
Figure 75: Future projections of greenhouse emissions in the Aluminium sector
5.1.7 Pathway for carbon neutrality in the Global Aluminium Industry
Decarbonizing the power supply:
Almost 70% of the carbon emissions during the Aluminium production are released from the electricity
consumption during the smelting process as the only commercial process for Aluminium production is
the Hall-Heroult process, where smelter grade Alumina is produced from Bauxite in the Bayer process.
Direct electric current is passed through prebaked carbon anodes and predominantly CO is formed as
2
a by-product. The decarbonization of the power supply can be achieved in the following ways.
1. Transitioning to renewable energy sources such as hydropower, geothermal, nuclear etc.
2. Using Carbon Capture Utilization and Storage (CCUS) technologies to capture CO by
2
separating it from other gases and either being transported to a suitable site for geological
storage or injected deep underground.
Decarbonizing process emissions:
Process emissions refer to the emissions released during industrial processes and on-site
manufacturing. Anode consumption in 2018 approximately accounted for 10% of sectoral emissions.
and the burning of fuel was responsible for 15–20% of them. The production of primary Aluminium
generates direct emissions from the electrolysis of Alumina using a carbon anode during smelting and
from fuel combustion during unit processes to produce heat and steam. This can be achieved in two
ways.
1. Development of a non-carbon anode. Replacing carbon anodes with an inert anode eliminates
direct emission from electrolysis.
92 Net-Zero Industry Tracker 2023 Edition, World Economic Forum, Nov 2023
Vision Document on Aluminium Metal for India 952. Transitioning to replace the use of fossil fuels. Using fossil fuels during refining can be replaced
by using green-hydrogen, solar water heaters etc.
Increasing scrap recovery:
The production from scrap only requires 5% of the energy compared to the production of primary
Aluminium. If 14.25 MT of scrap can be recycled it would result in the savings of an estimated 250 MT
of CO emissions per year. Scrap Aluminium has a great demand in the manufacture of automotive
2
parts, building materials, packaging (such as cans and foil), and consumer goods. Scrap Aluminium
can be better collected by improving collection and sorting systems for Aluminium waste also by
increasing public awareness about the benefits of recycled Aluminium.
Some of the initiatives being undertaken by global and domestic producers for the decarbonisation of
the Aluminium industry have been provided in Annexure 3.
5.1.8 Pathway for carbon neutrality in the Indian Aluminium Industry93
The Indian Aluminium industry emits 20.88 tonnes of CO per tonne of Aluminium in 2021 (18 tonnes
2
of CO per tonne of Aluminium in 2023). The following are the pathways for the net zero greenhouse
2
gas emissions in the Indian Aluminium industry.
1. Power sourced from renewable energy sources would reduce about 49% of the total
greenhouse gas emission intensity. As Aluminium production requires large amount of reliable
supply of electricity, we consider that 30% of the electricity demand still has to be met through
captive power plants.
2. Using Carbon Capture Technologies would help in capturing the CO emissions and storing
2
them to geological locations, thereby reducing 21% of the total greenhouse gas emission
intensity.
3. Increasing energy efficiency during the Aluminium smelting process and during the Alumina
extraction process would reduce 30% of the total greenhouse gas emission intensity.
The following is the graphical representation of net-zero greenhouse gas emission intensity pathway in
the Aluminium sector.
-2.62
-3.78
20.88
-10.14
-4.34
0
Emission Intensity Efficient extraction Efficient smelting RE sources CCUS Net-Zero
Figure 76: Emission mitigation pathway for Alumina refining and Aluminium smelting (tonnes of 𝐶𝑂 /tonne of
2
Aluminium)
93 Evaluating Net-zero for the Indian Aluminium Industry, CEEW, April 2024
Vision Document on Aluminium Metal for India 965.2 CCUS in Aluminium Sector94
The urgent need to decarbonize the Aluminium industry is evident. While various techniques and
alternative fuel sources aim for net zero by 2050, carbon capture stands out as a mature technology
already used in other energy-intensive sectors. This process can significantly reduce global warming.
Carbon Capture, Storage and Utilisation is a three-step process involving capturing the carbon dioxide
produced by power generation or industrial activity, transporting it and then it is stored deep
underground in porous rock layers or transferred via pipeline for reuse.
In most industries, CCUS is mature, but in the Aluminium sector, it is still in the early stages. Despite
this, it holds great potential for reducing the industry’s carbon footprint.
Although CCUS seems plausible, its adoption in the Aluminium Sector faces some challenges. The
primary challenge is the low CO Concentration. Aluminium smelters’ off-gas contains only about 1%
2
CO , while existing carbon capture technologies are designed for higher concentrations (around 4%).
2
Also, the off-gas pollutants are incompatible with current carbon capture technologies.
One of the leading Aluminium producers, Norsk Hydro, has made significant advancements in CCUS.
In 2021, Hydro partnered with Verdox, investing USD 20 million to develop an all-electric carbon capture
technology. This technology, tested in Hydro’s primary Aluminium smelter, shows promise and aims for
industrial-scale implementation by 2030.
CCUS is relatively new in India but is gaining traction. IIT Guwahati and NTPC are developing an
energy-efficient system for capturing CO from power plants, consuming up to 11% less energy than
2
current methods. IICT Hyderabad has developed a process to convert CO into high-purity hydrogen
2
from non-fuel grade bioethanol.
As these technologies mature, top Aluminium producers in India are expected to adopt carbon capture
to effectively reduce emissions thus contributing to the decarbonisation of the sector in India.
5.3 Green Aluminium: The Sustainable Metal-Key Trends
5.3.1 What is Green Aluminium?
Due to its production power source—hydroelectric, geothermal, nuclear, etc.—or proportion of recycled
content, environmentally friendly Aluminium is also known as "Green-Aluminium." Due to its significantly
lower carbon footprint than conventional Aluminium production methods, it is frequently referred to as
low-carbon or zero-carbon Aluminium. In particular, it includes delivering Aluminium with emissions of
less than 4 metric tonnes of CO per metric ton of Aluminium on a cradle to gate basis. This includes
2
emissions from the smelter all the way to the product's end of life.
95
5.3.2 Benefits of Green Aluminium
1. Mining, refining, and smelting are necessary steps for primary Aluminium production which are
energy intensive, but secondary Aluminium production does not require as much energy.
Aluminium scrap is collected, shrunk, separated, and melted during the secondary Aluminium
production process. As a result, recycling Aluminium only requires 5.0 to 7.0% of the energy
required to produce Aluminium from ore.
94 The Aluminium industry and carbon capture utilization & storage, Al Circle, 2-Mar-2023, last accessed on 01-Oct-2024
95 Aluminium Research, Analysis & Consulting | HARBOR Aluminium
Vision Document on Aluminium Metal for India 972. Recycling of Aluminium makes it a green metal as it utilizes considerably less energy as
compared with primary Aluminium, emits less harmful gases, generates minimal waste,
requires less water, and does not cause deforestation.
3. Recycled Aluminium will help in achieving zero land degradation goals by restoring land that
was degraded by 2030. Primary Aluminium manufacturing process results in generation of
hazardous waste and red mud that results in soil pollution.
4. It limits deforestation and conserves biodiversity.
5. Recently there has been an increasing demand in green Aluminium products especially in the
luxury automobiles section. This trend presents an opportunity for Aluminium producers to
differentiate their offerings and seize a competitive edge in the emerging green economy.
96
5.3.3 World’s Initiative towards Green Aluminium
Europe
Europe has the highest Aluminium recycling rate efficiency at 81%. Additionally, according to the
European Aluminium Association, the landmass has the highest per capita Aluminium re-use rate. In
fact, recycled Aluminium accounts for more than half of all Aluminium produced in Europe. Likewise,
end-of-life Aluminium recycling rates are high in Europe, at more than 90% in the construction and
automotive sector and 60% in the packaging sector. Europe also aims to increase the recycling rate to
ensure 100% recycling and availability of scrap. In fact, the region is targeting to implement improved
waste collection systems, better sorting and Aluminium recovery infrastructure, and end-user
engagement to achieve 100% Aluminium beverage can recycling by 2030.
Norway’s Norsk Hydro’s has a carbon footprint below 4 tonnes of CO /kg of Aluminium. Their primary
2
Green Aluminium product, called Hydro-Reduxa, uses at least 70% renewable energy sources such as
wind, solar and hydro power. The secondary Green Aluminium product called Hydro-Circal, which takes
in at least 75% of post-consumer scrap has a carbon footprint of 1.9 tonnes of CO / tonne of Aluminium.
2
Also, they are currently in the process of researching a way to replace liquid natural gas with green
hydrogen in the recycling of post-consumer scrap. Hydro has also collaborated with PADNOS to start
commercial operation of an advanced scrap sorting technology for processing complex post-consumer
scrap and achieve higher scrap recovery.
Asia
In China the percentage of energy used by hydropower sources in Aluminium smelters increased from
10% in 2015 to 19% in 2024. In China majority of Carbon emissions from Aluminium are scope-2
emissions. The scope 2 carbon emissions by Aluminium smelters in Yunnan is around 0.7 tonnes per
tonne of Aluminium. In December 2022, Non-ferrous metals society of China and China Non-ferrous
Metals Industry association (CNIMA) published a guide so that Green-Aluminium can be distinguished
from Aluminium produced using thermal power thus satisfying the demands of downstream products of
the consumers. China produces more than 10 MT of scrap Aluminium each year, accounting for over
30% of the annual global total.
Middle East
The UAE was apparently the first country in the world to produce Aluminium using the power of the sun
according to a 2021 report Dubai Electricity and Water Authority (Dewa) and Emirates Global Aluminium
(EGA) released. Dewa is the supplier of EGA’s smelter with 560,000 megawatt hours of solar power
yearly from the Mohammed bin Rashid Al Maktoum Solar Park. The energy is sufficient to make 40,000
96 Industry Sources
Vision Document on Aluminium Metal for India 98tonnes of Aluminium in the first year with the potential for significant expansion. EGA will supply solar
power-based Aluminium to global customers under the new product name, CelestiAL.
North America
According to IAI, North America has the world’s highest RIR (Recycling Input Rate) which is a metric
used to quantify the proportion of recycled material used as the input for production of new materials or
products with 57% of the metal produced in the region originating from scrap.
5.3.4 India’s Initiative towards Green Aluminium
Recycling Technologies
In India, Aluminium scrap import follows International Scrap Recycling Institute (ISRI) specifications. To
ensure that the imported scrap does not have any hazardous element, the Aluminium scrap is checked
by Customs for ISRI-based specifications, and radioactive elements and explosives. Scrap Aluminium
is processed for return to the market in a series of steps: pre-processing, melting, alloying, refining, and
casting. At present Indian recyclers have implemented following technologies.
1. Automatic segregation and sorting equipment such as eddy current separator, washing table,
heavy media separation, color sorters, and others.
2. Shredder / shearing machines to cut large scraps into required sizes.
3. Smelting furnaces.
4. Automatic casting and stacking system, cyclone separators, scrubbers for emissions such as
dust and gas/fumes to ensure eco-friendly processing.
5. Auto chargers for feeding raw material into furnaces
6. Regenerative burners to achieve better combustion efficiency, reduced fuel consumption and
reduced emission of CO and CO into the environment
2
7. Dross processing to minimize or avoid solid waste.
5.4 Enabling the Circular Economy with Aluminium97,98,99
The circular economy is a sustainable model designed to minimize waste, reduce emissions and
maximize resource use. Unlike the traditional “take-make-dispose” approach, it focuses on keeping
products, materials, and resources in use for as long as possible. Key principles include designing
products to be durable, repairable, and easy to disassemble, promoting reuse and refurbishment. When
items reach the end of their life, they are recycled or repurposed, closing the material loop.
The circular economy aims to separate economic growth from resource use and environmental harm.
It promotes sustainable practices that benefit the environment and offer economic advantages, such as
lower production costs, new opportunities in recycling and remanufacturing, and greater resilience to
resource scarcity and supply chain disruptions. Governments, businesses, and organisations worldwide
are increasingly adopting circular economy principles to address these challenges and create a more
sustainable and resilient global economy.
In an era where environmental sustainability is of utmost importance, Aluminium plays a crucial role in
this model due to its high recyclability. It can be recycled indefinitely without losing its properties, making
97 Innovation action plan for Aluminium in a circular economy, Dr. Christopher Pilgrim, last accessed on 01-Oct-2024
98 IAI study highlights vital role of Aluminium cans in a circular economy, International Aluminium Institute, last accessed on 01-
Oct-2024
99 How Aluminium is leading the circular economy recycling revolution, Al Circle, 14th Oct 2023, last accessed on 01-Oct-2024
Vision Document on Aluminium Metal for India 99it a key driver in India’s climate-neutral and circular economy ambitions. Recycling Aluminium uses only
5% of the energy required to produce new metal, significantly reducing CO emissions.
2
For example, Aluminium cans are widely used in the beverage industry and are an environmentally
responsible choice due to their recyclability. Today, Aluminium cans are the most recycled beverage
containers globally. Once collected, they have an unrivaled sorting, reprocessing, and remelting
efficiency rate of 90%, compared to 67% for glass and 66% for PET.
However, challenges remain. Improving the collection and sorting of Aluminium products, raising
consumer awareness about recycling, and investing in advanced sorting technologies and recycling
infrastructure are essential to fully realize Aluminium’s potential in the circular economy.
By embracing a circular economy framework and fostering collaborative communities based on three
key principles: Circular Design, Circular Business Models, and Circular Recovery; we can inspire
industry members to unite in reducing environmental impact and achieving Net Zero goals.
➢ Circular Design: From choosing materials to evaluating how products and services interact with
people and systems, and considering end-of-life disposal, design is a fundamental pillar of circular
economy systems. The Aluminium sector can reduce its environmental impact by improving design
practices.
➢ Circular Recovery: Focusing on retaining assets throughout value chains and procurement
policies can reduce the need for new feedstocks, lower costs, and mitigate supply chain risks. This
is particularly important for Aluminium, where primary production has a significant environmental
impact.
➢ Circular Business Models: Circular business models define how an organization creates and
delivers value to stakeholders while eliminating waste and environmental harm as materials and
products circulate through the economy. Aluminium has the potential to lead in setting
environmental standards, enhancing the value of domestic production, and achieving more with
fewer resources.
For a Circular Economy to be truly effective, it must operate as a closed-loop system. This requires
Aluminium product manufacturers to collaborate closely with end-user industries to enhance scrap
collection and sorting, minimizing the mixing of alloys. By returning scrap to the original manufacturer
rather than repurposing it or selling it to scrap dealers, the loop can be closed. Recycling within the
same alloy family is crucial for achieving closed loop circularity. Mixing different alloys makes the
resulting metal difficult to reuse for its original purpose and often necessitates adding large amounts of
new metal.
For example, if scrap from an Aluminium uni-alloy car door is sent back to a rolling mill and recycled in
a closed-loop process, it can be continuously remanufactured into material for new car doors. However,
if Aluminium alloys are mixed with other alloy families during the scrap sorting process, they may no
longer be fit for use to produce wrought materials, such as car doors. Instead, they will be utilized in a
different value stream, representing a significant missed opportunity for circularity and resulting in a
loss of CO savings100.
2
Brazil exemplifies an effective closed-loop recycling system, particularly for Aluminium beverage cans.
In 2022, the country achieved a remarkable milestone by recycling 100% of the Aluminium cans
consumed domestically. Aluminium cans are collected from various sources including homes,
businesses and public spaces through a well-organized network of collectors and recycling centers. It
has initiatives like “Garimpeiro Urbano” (Urban Mining), which involve extensive networks of collection
centers working with local suppliers, cooperatives, and municipalities to gather recyclable materials. It
100 Closed Loop Aluminum Recycling is a Key Driver in the Sustainable Cars of the Future, Light Metal Age, April 25, 2024, last
accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 100employs state-of-the-art automated sorting systems to separate Aluminium from other materials.
Advanced sorting technologies in Brazil can separate Aluminium scrap based on density and chemical
composition. At recycling facilities, the cans are sorted to remove contaminants and compressed into
bales for easier handling and transportation to reprocessing plants where the Aluminium is shredded,
de-coated, melted, and cast into ingots. Finally, the ingots are rolled into fresh Aluminium sheets, ready
to be used in manufacturing new beverage cans101.
Companies like Novelis and Constellium collaborated with end-user industries to establish closed-loop
circular systems for Aluminium, ensuring high-quality standards and significantly reducing emissions.
5.5 Comparison of India as against global Aluminium
recycling rates
5.5.1 Aluminium life Cycle
Aluminium production starts with the mining of Bauxite. Bauxite is then refined using the Bayer process
to extract Alumina. Alumina is then broken down by electrolysis to produce primary Aluminium. The
primary Aluminium is then fabricated to make finished products.
After their usage the products reach a stage after which they are no longer useful, this stage is called
End of life products. From the end-of-life products a certain portion is recovered for recycling. This
portion is often contaminated, and it requires extensive sorting, cleaning and remelting to recycle the
scrap to produce secondary Aluminium.
5.5.2 Different metrics for Aluminium Recycling Rates
There are various metrics for Recycling Rates of Aluminium. The two most significant one are102:
End of Life Recycling Rate (EOL-RR):
The End-of-Life Recycling rate is defined as the ratio of Recycled End of Life metal to the End-of-Life
metal products. It depends on two factors, which are the old scrap collection rate and recycling rate
efficiency. Their product gives the End-of-Life Recycling Rate. The EOL-RR for India for Aluminium is
around 30%103 while the global EOL-RR is around 56% as the old scrap recovery rate for Aluminium
for the world is about 74% and the recycling rate efficiency for Aluminium globally is 76%104.The old
scrap recovery rate of China is quite high at over 80% as per 2021 figure. The highest recycling
efficiency rate of Aluminium is of Europe which is at 81% which makes their EOL-RR at about 64% as
their old scrap recovery rate is about 79%105
Recycling Input Rate (RIR):
The Recycling Input Rate refers to the fraction of scrap metal in the total input of metal production. The
RIR for India is around 25% while the global average RIR is around 35% as per 2021 figure. Europe
and North America both have RIR of around 60%
5.5.3 Reasons for India’s low Recycling rate of Aluminium
The low recycling rates of Aluminium in India can be attributed to several factors:
Infrastructure and Technology Limitations:
101 Pioneering and the point of reference in Aluminium recycling, LATASA Brazil, last accessed on 03-Oct-2024
102 Recycling Rate of Metals, A Status Report, UNEP
103 National Non-Ferrous Metal Scrap Recycling Framework, Ministry of Mines, 2020
104 Aluminium Recycling, International Aluminium Institute, 2021, last accessed on 03-Oct-2024
105 Public Access - International Aluminium Institute (world-Aluminium.org), last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 101The recycling infrastructure in India is underdeveloped compared to other countries. Limited access to
advanced recycling technologies hampers the efficiency and profitability of recycling operations.
Consequently, the recycling rates remain low because many recyclers are unable to invest in or access
the necessary technology.
Lack of Awareness and Segregation at Source:
There is insufficient public awareness about the importance of Aluminium recycling. Coupled with
inadequate waste segregation practices at the source, a large portion of Aluminium scrap ends up in
landfills instead of being recycled. This issue is compounded by the informal nature of the recycling
sector in India, which often lacks the resources and organization to efficiently collect and process
Aluminium waste.
Market Dynamics:
Fluctuations in global Aluminium prices, especially on the London Metal Exchange (LME), also affect
recycling rates in India. When prices drop, the incentive to recycle decreases because the economic
returns are lower, leading to reduced recycling activity
These factors collectively contribute to the relatively low recycling rates of Aluminium in India, despite
the growing demand for the metal. Addressing these issues will be crucial for improving the
sustainability of the Aluminium industry in the country.
Ultimately, Aluminium stands out as a key commodity in the circular economy due to its
exceptional recyclability and versatility. As environmental responsibility becomes more crucial,
Aluminium’s importance will grow. By enhancing recycling practices and embracing this metal,
we can work towards a greener, more sustainable future with conserved resources, minimized
waste, and a thriving circular economy.
Vision Document on Aluminium Metal for India 1026. Demand Forecast
2030 and 2047
Vision Document on Aluminium Metal for India 1036 Demand Forecast 2030 and 2047
6.1 Megatrends likely to Affect Aluminium Industry
Megatrends (MTs) are affecting nearly every facet of human life. Trends like rapid urbanisation, climate
change, and shifting economic power are transforming markets, disrupting supply chains, and altering
global manufacturing demographics. These megatrends are currently driving the growth in Aluminium
demand globally and in India and it will play a crucial role in determining the industry’s future demand
trajectory.
Several megatrends (MTs) exhibit overlapping effects. For instance, population growth and urbanisation
contribute to rising energy demand. This increased energy demand intersects with other megatrends,
such as climate change, particularly in the expansion of renewable energy sources.
6.1.1 Growing Population and Urbanization
The history of humanity is one of urbanization and the swift expansion of cities. The world population is
estimated to have surpassed 8 billion in 2022, with 56.9% of the global population living in urban areas,
up from 30% in 1950. By 2050, the UN forecasts that 68% of the world’s population, which is projected
to be 9.67 billion, will live in cities. India’s population is estimated to be 1.67 billion in 2050, with nearly
53% living in urban areas.
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Figure 77: World and India Population and Urban Population (%)
Increasing population and urbanization naturally create more Aluminium demand, particularly in
construction, electrical grid expansion, infrastructure, and transport. With urbanization rates growing
fastest in Asia (especially in India and China) and Africa, stronger growth is forecast in these regions.
6.1.2 Energy Demand and Sources
Urbanization, characterized by the rapid expansion of cities and dynamic economic development,
particularly in emerging economies, is driving a continuous rise in energy demand. Due to climate
change commitments, the world is increasingly adopting cleaner methods of electricity production.
Achieving these targets, including net zero goals, has significant implications for future pathways. Clean
Vision Document on Aluminium Metal for India 104electrification, enhanced efficiency, and a transition to lower- and zero-carbon fuels are crucial
strategies for emerging and developing economies to meet their national energy and climate objectives.
India leads the world in energy demand growth, surpassing Southeast Asia and Africa. The country is
entering a dynamic new phase in its energy development, characterized by a long-term net zero
emissions goal, advanced regulatory measures, a focus on clean energy deployment, and the
establishment of domestic clean energy technology supply chains. Recognizing the potential to
transform its energy sector, reduce fossil fuel imports, and lower CO emissions, India has set a net
2
zero emissions target for 2070 and implemented policies to scale up clean energy supply and
technology manufacturing. India is expected to achieve its 2030 target of having half of its electricity
capacity from non-fossil sources well before the end of the decade. If the new solar PV module
manufacturing capacity under the PLI program becomes fully operational by 2026, it will significantly
advance India’s solar PV module manufacturing capacity, exceeding the requirements for the end of
this decade in both the STEPS (Stated Policies Scenario) and APS (Announced Pledges Scenario)
scenarios. While the World’s electricity generation is estimated to grow at a CAGR of 2.24% and 3.02%
by 2050 in the STEPS and APS scenarios respectively, India’s electricity generation is expected to grow
at a much faster pace. India’s electricity generation is estimated to grow at a CAGR of 4.27% and 4.82%
by 2050 in the STEPS and APS scenarios respectively.
Electricity transmission has long been a significant and established market for Aluminium. It is also
essential for the renewable energy sector, including solar and wind systems, representing a strong
growth area. The World Bank estimates that Aluminium demand in this sector will reach 5.5 MT by
2050. Bloomberg NEF forecasts that, to achieve a net-zero world, global transmission lines will nearly
triple by 2050, from about 6 million kilometers in 2020. India’s Green Energy Corridor project aims to
create transmission capacity to integrate an increasing share of variable renewable power. The
transmission plan targets the integration of 500 GW of renewable capacity by 2030. As of October 31,
2022, the total circuit kilometers (ckm) of transmission lines in India was 463,758 ckm, and by 2030, an
additional 50,890 ckm will be required to integrate the additional renewable energy capacity106.
On one hand, growing demand is expected to boost Aluminium consumption. However, since electricity
is a major cost factor in Aluminium production, rising energy prices could negatively impact demand.
Recently, the surge in energy prices across Europe, fueled by the Russia-Ukraine war, has led to higher
production costs and reduced Aluminium output. In China, stringent energy consumption policies and
efforts to reduce carbon emissions have caused power shortages and increased energy costs. Similarly,
in the Middle East, rising energy prices have affected the cost of Aluminium production, impacting their
competitiveness in the global market.
Overall, the Aluminium demand will continue to grow driven by the energy demand and other
megatrends like population growth, urbanisation, and economic growth.
106 Transmission System for Integration of over 500 GW RE Capacity by 2030, Central Electricity Authority, Dec-2022, last
accessed on 01-Oct-2024
Vision Document on Aluminium Metal for India 10566,760
53,985
29,033
11,889
6,605
289 1,766
5,694
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
World India World STEPS World APS India STEPS India APS
Figure 78: World and India Electricity Generation Estimates (TWh)107
6.1.3 Technology Disruptions108
Technological advancements are accelerating, and their impacts are increasingly significant. These
changes will greatly influence Aluminium demand, though predicting specific outcomes is challenging.
Technological disruptors could either increase or decrease Aluminium demand. For instance, a new
low-cost Aluminium smelting process could make Aluminium more cost-competitive against substitutes,
while new materials could reduce its competitiveness.
New Aluminium alloys could open up new applications and markets, whereas alternative materials like
high-strength wood products and lightweight ceramics might capture market share from Aluminium.
Research is ongoing into high-strength power cable alloys that could reduce the volume of Aluminium
needed to carry the same current.
Aluminium batteries are also a very active research area with the potential to significantly boost
demand. Aluminium demand is also expected to increase with innovations in sectors such as
automotive, aerospace, and electronics which need high-performance materials. On an average, 40-45
kg of Aluminium is used per vehicle in India compared to the global average of 160-200 kg. The focus
on vehicular weight reduction to improve fuel efficiency will also result in higher Aluminium consumption
in India109. It is worth studying how global vehicles with more Aluminium content still perform better in
crash-tests compared to Indian automotives.
The Aluminium demand for EVs is expected to rise significantly, with global EV sales projected to reach
62 million units by 2050 with nearly 700 million units on roads.110 Nearly 14 million new electric cars
were registered globally in 2023. As per projection on the basis of the data from Vahan portal and NITI
Aayog’s sales projections, EV stock in India will become 3.49 Crores in 2030 from 0.40 Crores in 2024
and rise to 15.19 Crores in 2050, while the EV battery market is expected to grow the same timeframe.
The substitution of Aluminium by carbon fiber is a significant threat across various industries. Carbon
fiber composites, made from carbon fibers and resin, are leading the charge in replacing traditional
Aluminium parts. These composites have an exceptional strength-to-weight ratio, being up to five times
107 World Energy Outlook 2023, International Energy Agency
108 An Assessment of Global Megatrends and Regional and Market Sector Growth Outlook for Aluminium Demand, CM Group,
2020
109 Primary Aluminium Industry, ICRA, Aug 2023, last accessed on 03-Oct-2024
110 700 million electric vehicles will be on the roads by 2050, Wood Mackenzie, Feb 08, 2021, last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 106lighter than steel and much lighter than Aluminium. This weight reduction enhances fuel efficiency in
vehicles, lowers energy consumption in machinery, and increases payload capacity in aerospace. The
shift from Aluminium to carbon fiber is already evident in many sectors, showcasing clear benefits.111
New research from Cranfield University's Sustainable Manufacturing Systems Centre has found that
switching from Aluminium to zinc alloys in automotive parts can significantly enhance their longevity
and sustainability. The study highlights that zinc alloys are more sustainable and offer higher
performance compared to Aluminium.112
Despite the potential for disruptions due to adverse technological changes, it is believed that
technological advancements in the Aluminium and associated sectors will have an overall positive
impact on Aluminium demand growth.
6.1.4 Climate Change
Despite efforts to reduce carbon emissions, greenhouse gas levels in the atmosphere continue to
worsen. This is leading to rising global temperatures and an increase in the frequency and severity of
extreme weather events which are increasingly affecting every aspect of human life. According to a
press release by World Meteorological Organisation, Global temperature is likely to exceed 1.5°C above
pre-industrial level temporarily in next 5 years113. This underscores the need for urgent measures to
achieve more rapid cuts in GHG emissions.
Aluminium plays a crucial role in combating climate change, primarily through light-weighting in
transportation, especially in vehicles, as well as in renewable energy infrastructure and power cabling.
The demand and supply of Aluminium are closely linked through the primary production process. The
carbon footprint is becoming a key quality attribute for all materials. Primary Aluminium production is
highly CO -intensive when fossil fuels are used for electricity, which harms its long-term reputation and
2
suitability as a preferred material. The Aluminium industry must decisively reduce average CO
2
emissions to avoid significant demand challenges, driven by consumer backlash and stringent
government restrictions on high CO emitters.
2
Sustainability reports from Aluminium companies increasingly outline plans to achieve zero carbon by
2050. In the coming years, with the transition to renewable energy sources, implementation of CCUS
technologies, improving energy efficiencies, increased recycling and adoption of low carbon
technologies, the Aluminium industry is expected to address CO emissions during primary production,
2
leading to substantial long-term growth.
6.1.5 Changing Geopolitical Landscape
Aluminium industry forms the foundation of modern manufacturing and infrastructure, essential for
everything from automobiles and electronics to green energy and even soda cans. Most importantly
though, Aluminium industry is the backbone of aerospace sector which has strategic significance.
However, this market is being impacted by the significant transformations taking place in the geopolitical
landscape. Understanding these dynamics is crucial for navigating the challenges and opportunities it
presents for the Indian Aluminium industry.
Traditional alliances are being tested and reconfigured. The rivalry between the United States and
China is a central feature of the changing geopolitical order. This competition influences global
alliances, trade policies, and military strategies. The interactions between these two nations are pivotal
111 Upgrading to the Future: Replacing Aluminium parts with Carbon fibre, Carbon Parts, 01-Aug-2023, last accessed on 01-
Oct-2024
112 Switching from aluminium to zinc alloys could make cars more sustainable, IMECHE, 09- Jun- 2020, last accessed on 01-
Oct-2024
113 Global temperature is likely to exceed 1.5°C above pre-industrial level temporarily in next 5 years, World Meteorological
Organization, 05-Jun-2024, last accessed on 01-Oct-2024
Vision Document on Aluminium Metal for India 107in defining the international landscape. China + One is a clear positive outcome of this stress which is
benefiting Indian manufacturing sector growth. The United States’ focus on internal issues has allowed
other global powers, such as China and Russia, to assert more influence. The European Union is also
striving for greater strategic autonomy, particularly in defense and trade.
Recent geopolitical crises, including the Russia-Ukraine- NATO conflict, Israel-Hamas-Hezbollah-Iran
conflict, the Red Sea shipping crisis, rising tensions in the South China Sea, and protectionism, (not to
mention COVID) are sending shockwaves through global supply chains. These events are disrupting
global prices, production, and trade. Western European nations like Germany, which relied heavily on
Russian Aluminium imports, are facing supply shortages and high prices. This adds stress to the
region’s industry, already grappling with an energy crisis and looming recession.
These flashpoints have created a complex web of sanctions, tariffs, and quotas, disrupted established
trade routes and created uncertainty. Trade wars between major producing countries like USA, China,
Russia, and Europe, have affected the market, creating both opportunities (for other producing countries
like India, Indonesia, Brazil etc.) and risks (for import dependent nations like South Korea, etc.). Lessons
may be drawn from the Indian steel sector which is fighting dumping from East Asia on the one hand,
whereas on the other it is at the receiving end of potential anti-dumping action from Europe. The fine-
line between free-trade and protectionism is becoming increasingly difficult to navigate.
Another growing concern is the rising trend of resource nationalism, where governments increase
control over their natural resources. This is reshaping the Aluminium supply chain, with implications for
mining regulations, taxation, and trade. Many countries like Guinea are trying to increase their control
over Bauxite deposits, by demanding higher taxes and greater local ownership.
Rising shipping costs, driven by security threats in key shipping lanes, add to the challenges. Delays in
shipments due to vessel rerouting are disrupting supply chains, leading to higher transport costs and
insurance rates. The disruption of Red Sea routes and threats in the South China Sea are compounding
these issues, straining the Aluminium supply chain.
Amidst this complex game, India is making strategic moves of its own. India’s foreign policy is
characterized by a balance between strategic autonomy and engagement with multiple global powers,
reflecting its aspirations in a multipolar world. Over the past decade, India’s geopolitical alliances have
evolved significantly. India has strengthened its alliances, particularly with the US, Japan, and Australia
through the Quad, while maintaining strong ties with Russia.
The US-India relationship has deepened, particularly through the Quadrilateral Security Dialogue
(Quad) with Japan and Australia, focusing on a free and open Indo-Pacific. This partnership has grown
in response to China’s assertiveness in the region. India and Japan have strengthened their strategic
partnership, focusing on economic cooperation, infrastructure development, and regional security. This
includes collaborations on projects like the Mumbai-Ahmedabad High-Speed Rail.
Despite closer ties with the US, India has maintained a strong relationship with Russia, including
defense cooperation and energy partnerships. The two countries have signed multiple agreements,
including a 10-year military cooperation pact.
India has enhanced its engagement with the EU, focusing on trade, investment, and climate change.
The EU-India Strategic Partnership has seen renewed vigor, especially in areas like digital cooperation
and sustainable development. India’s relationships with Middle Eastern countries, particularly the UAE
and Saudi Arabia, have grown, focusing on energy security, trade, and investment. The India-Middle
East-Europe Economic Corridor (IMEC) is a significant initiative aimed at enhancing connectivity and
economic integration between Asia, the Persian Gulf, and Europe. Given the cost of energy is the least
in the middle east, and given its proximity to the Europe, it makes sense for Indian industry to evaluate
distributed supply chains, sustainability concerns permitting. There was a time when the Indian
Government was actively evaluating a smelter in Iran. Given the potential in India’s defence
Vision Document on Aluminium Metal for India 108manufacturing sector and its good relationship with the GCC, it is possible to imagine a joint venture
between India and any suitable GCC state to work on special grade alloys based on high grade primary
Aluminium from Alba/ EGA and supply it to the world along with India.
Through initiatives like the Act East Policy, India has continued to strengthen its ties with ASEAN and
BIMSTEC countries, aiming to enhance economic and security cooperation in Southeast Asia.
Notwithstanding this, the geo-political environment in India’s immediate periphery is unstable. This
might require the government to divert funds otherwise meant for development to protect national
security interests.
The “China Plus One” strategy has gained increasing importance due to shifting global dynamics and
the uncertainties associated with over-reliance on Chinese manufacturing. Although many companies
had been considering this approach since the mid-2010s, the US-China trade war and the supply chain
disruptions caused by the COVID-19 pandemic compelled them to act. This has benefitted India
positioning it as a key player in the global manufacturing landscape.
These partnerships support India’s strategic interests and drives domestic Aluminium consumption
supported by India’s government initiatives, like infrastructure development and green energy projects
and are boosting Aluminium demand. In 2023, India was a standout player in Aluminium production and
consumption, even as the global market faced a slow recovery.
In summary, it is difficult to conclude whether the current instability across the world will negatively
impact demand for Aluminium (in the construction, transportation sectors) or increased use (in space
and military aircraft making) in the medium to long term.
6.1.6 Emerging Economic Power
China has long been a driving force in the global economy. In 2022, it was the second biggest economy
after the USA. Meanwhile, India has made remarkable progress, climbing from the 13th spot in 2000 to
the 5th largest economy in 2022. Forecasts from organizations such as Goldman Sachs, the IEA, and
the IMF suggest that India will be the fastest-growing economy in the coming years, potentially
becoming the third-largest economy by 2050.
India is on its path to becoming a developed economy by 2047 under the Viksit Bharat vision. The
government is focusing on economic policies that encourage investment, foster innovation, and
promote sustainable growth. Key programs like Make in India, Digital India, and Startup India
demonstrate the commitment to creating a business-friendly environment and generating employment.
Large-scale infrastructure projects, including roads, railways, ports, and urban development, are being
launched. Initiatives like Pradhan Mantri Awas Yojana, Bharatmala, Sagarmala, and the Smart Cities
Mission highlight the focus on building livable, sustainable cities, enhancing connectivity, and providing
affordable housing. The introduction of Vande Bharat trains and the UDAN initiative has made travel
more convenient for citizens. Additionally, the expansion of metro networks ensures smooth travel
within cities.114 This rapid economic growth is expected to position India as a key driver of Aluminium
demand, not just in Asia, but globally.
However, the global economy is on the verge of a recession, driven by a combination of economic
factors such as a global slowdown and high inflation rates, as well as geopolitical factors including rising
tensions and conflicts among nations worldwide. While the global recession presents challenges,
India’s economic fundamentals, proactive government policies, and strong domestic market position it
to navigate these difficulties better than many other economies. Continued focus on infrastructure, and
strategic international partnerships will be crucial for sustaining growth.
114 Viksit Bharat: The Vision of PM Modi (narendramodi.in), 24-Feb-2024, last accessed on 01-Oct-2024
Vision Document on Aluminium Metal for India 109Table 9: World's Largest Economies Ranking115
Ranking 1980 2000 2022 2050
1 USA USA USA China
2 Japan Japan China USA
3 Germany Germany Japan India
4 France United Kingdom Germany Indonesia
5 United Kingdom France India Germany
6 Italy China United Kingdom Japan
7 China Italy France United Kingdom
8 Canada Canada Canada Brazil
9 Argentina Mexico Russia France
10 Spain Brazil Italy Russia
11 Mexico Spain Brazil Mexico
12 Netherlands Korea Korea Egypt
13 India India Australia Saudi Arabia
14 Saudi Arabia Netherlands Mexico Canada
15 Australia Australia Spain Nigeria
The attractiveness of the Indian Aluminium sector has generated interest from new players who have
previously not had any footprint in the sector. This can be evidenced from their participation in Bauxite
block auctions and various other tenders they have been floating to evaluate their entry into the
Aluminium sector.
6.2 Growth Drivers and Demand Forecast for Domestic
Aluminium Consumption in Short Term (FY30) and
Long Term (FY47)
6.2.1 Approach for demand forecasting
To forecast India's domestic Aluminium demand for FY30 and FY47, the GDP elasticity of Aluminium
demand across the end-use sectors have been considered-
1. Data Collection: Last 20 years historical data on India's GDP and Aluminium demand in each of
the end-use sectors- packaging, transportation, building & construction, electrical, machinery &
equipment, consumer durables & others (defence, aerospace) were collected.
115 The Path to 2075 — Slower Global Growth, But Convergence Remains Intact, Goldman Sachs, 06-Dec-2022, last accessed
on 01-Oct-2024
Vision Document on Aluminium Metal for India 1102. Calculation of GDP Elasticity of Aluminium demand: The GDP elasticity of Aluminium demand
for each sector was determined by analyzing how Aluminium demand has changed with respect to
changes in GDP over time. While doing this exercise, outlier data or data of years known to have
issues (e.g. COVID years) were removed.
3. Projection of GDP Growth:
India’s growth is largely predicated by its domestic economic health. Owing to its large population
and large land area it is possible for India to be reasonably insulated from global events. While a
turnaround is visible in domestic capex in real estate, power, steel etc. sectors, increasingly India’s
neighbourhood is also turning out to be a drain on its budget, not to mention the high energy and
fertilizer costs around the world. India’s fiscal deficit is in control but that is also the reason for a
tight monetary regime preventing unfettered growth.
Economic forecasts by different agencies (namely Goldman Sachs, IMF etc.) across different
horizons were referred to project India's consensus GDP growth up to 2030 and 2047. GDP forecast
by various agencies considered is shown in a table below:
Table 10: GDP Growth Projection by Different Agencies
GDP Growth Projections
Report Name
Short Term Medium Term Long Term
The Path to 2075, Goldman 2024-2029: 5.8% 2030-2039: 4.6% 2040-2049: 3.7%
Sachs
Economy Watch,
Monitoring India’s Macro 2031-2035: 6.2% 2041-2045: 4.8%
2026-2030: 7.0%
Fiscal Performance, EY 2036-2040: 5.3% 2046-2050: 4.4%
India116
International Monetary
Fund, World Economic
2024-2029: 6.5% - -
Outlook Database, April
2024
Focus Economics
2023-2025: 6.7%
Consensus Forecast, April - -
2026-28: 6.5%
2024
The approach being taken for determination of Aluminium demand and consequently capacity, is a
top-down approach. It must be met by bottom-up actions. The risk of assuming high GDP rates and
thereby a high demand for Aluminium may lead to creation of capacities ahead of actual demand
fructifying. India has already seen the consequences of unbridled capex and credit growth in the
steel sector and the subsequent turn of events between 2014 until IBC came through. A prudent
approach should be one which provides additional land to entrepreneurs to expand capacity beyond
the core line that is set up. After all the world is not in a very good place and India’s continuous
116 Indian economy by 2050: In pursuit to achieve the $30 trillion mark, EY-India, Aug 25, 2022, last accessed on 01-Oct-2024
Vision Document on Aluminium Metal for India 111insistence on its insulation from the global economy can sometimes fall flat depending on the scale
of global machinations. After all, in this year’s Independence Day speech the prime minister
mentioned that – “Challenges are abundant, both internal and external. As we grow stronger and
gain more attention, these challenges are bound to increase. External challenges, in particular, are
likely to escalate, and I am well aware of this. However, I want to convey to such forces that the
development of Bharat does not mean a threat to anyone. Even in the past, when we were
prosperous, we never dragged the world into wars. We are the land of Buddha, and war is not our
path. Therefore, the world need not worry. As Bharat progresses, I urge the global community to
understand Bharat’s values and its thousands of years of history. Do not perceive us as a threat.
Do not resort to strategies that might make it harder for a land capable of contributing to the welfare
of all humanity.”
It would be naïve to think that India’s Consumption and Investment growth is a sheer function of
domestic factors. The proposed hydro-projects in Arunachal Pradesh are already being opposed.
The metals sector has seen the way in which Sterlite copper at Tuticorin and Niyamgiri bauxite
reserves in Odisha have stalled. Hence the numbers assumed have been largely conservative,
especially in the long run.
4. Adjustment of GDP elasticity: Calculated GDP elasticity of Aluminium demand for each sector
were adjusted considering any known future policies, market trends, or technological
advancements that could significantly affect Aluminium demand.
5. Forecast sector-wise Aluminium demand: The adjusted GDP elasticity of Aluminium demand for
each end-use sector were multiplied with the projected GDP growth to estimate the future growth
rate of Aluminium demand for each sector. The growth rate was used to forecast end-use sector
wise Aluminium demand.
6. Aggregate Demand forecast: The forecasted demand across all sectors were summed up to get
the total Aluminium demand for the forecast years.
6.2.2 Demand Forecast in Short Term (FY30) and Long Term (FY47)
Actual Consumption (MT) Forecasted Demand (MT)
Scenarios
FY FY FY FY FY FY FY FY FY FY FY FY
04 08 12 16 20 21 22 23 24 30 40 47
Scenario 1 8.4 15.7-17 23.5-24.7
Scenario 2 0.55 1.69 2.40 3.20 3.71 3.40 3.90 4.45 4.95 8.7 19.3 32
Scenario 3 8.5 18 28
India's Aluminium demand has been forecasted using end-use sector wise historic GDP elasticity of
demand. This analysis considers two scenarios:
i. Scenario 1: Demand projection basis consensus (Industry feedback, projections by different
economists etc.) Real GDP growth forecast for short-term, medium-term and long-term.
ii. Scenario 2: Demand projection basis GDP growth to achieve a USD 30 trillion economy in line with
India’s Vision@2047. The reason for taking this scenario is that self-fulfilling prophecy also plays a
role in achieving apparently stretch-targets. When 300 MTPA target was taken for steel production
Vision Document on Aluminium Metal for India 112by 2030-31, many were skeptical. However, the industry has rallied around this vision and appears
to be well-set to come close to this number.
iii. Scenario 3: Average of Scenario 1 and Scenario 2
The forecasting methodology involves analyzing the historic GDP elasticity of demand for Aluminium
across various sectors. This elasticity measures the responsiveness of Aluminium demand to changes
in GDP. By applying these elasticities to the projected GDP growth rates under the two scenarios, future
Aluminium demand has been estimated.
Scenario 1: Demand projection basis Real GDP growth Forecast
Under the Real GDP growth forecast117, India’s Aluminium demand is projected to grow steadily. The
demand is expected to align with the GDP growth rates, reflecting a consistent increase in Aluminium
consumption across various sectors. Under this scenario:
• Short-term (2024-2030): India's Real GDP is projected to grow at an annual rate of 6.5% during
this period and the anticipated domestic Aluminium demand is estimated to be 8.4 MT by FY30.
• Medium-term (2031-2040): India's Real GDP is projected to grow at an annual rate of 4.6% during
this period. Given the GDP growth projection of 4.5-5.0%, the anticipated domestic Aluminium
demand is estimated to be between 15.7 and 17 MT by FY40.
• Long-term (2041-2047): India's Real GDP is projected to grow at an annual rate of 3.7% during
this period. Given the GDP growth projection of 3.5-4.0%, the anticipated domestic Aluminium
demand is estimated to be between 23.5 and 24.7 MT by FY47.
Scenario 2: Demand projection basis GDP growth to achieve a USD 30 trillion economy in line
with India’s Vision@2047
India's ambitious vision to become a USD 30 trillion economy by 2047 presents a more aggressive
growth scenario. In the context of achieving a USD 30 trillion economy by 2047, GDP growth rate needs
to be aggressive118 and the Aluminium demand is anticipated to surge significantly. This scenario
assumes accelerated economic activities and infrastructure development, leading to a higher demand
for Aluminium.
• Short-term (2024-2030): With a projected GDP growth rate of 7%, the expected domestic
Aluminium demand is approximately 8.7 MT by FY30
• Medium-term (2031-2040): With a projected GDP growth rate of 5.8%, the expected domestic
Aluminium demand is approximately 19.3 MT by FY40
• Long-term (2041-2047): With a projected GDP growth rate of 4.8%, the expected domestic
Aluminium demand is approximately 32 MT by FY47
Conclusion
The domestic Aluminium demand forecast for India under both scenarios indicates robust growth, with
Scenario 2 presenting a more optimistic outlook. By averaging the projections from both scenarios,
accounting for both base-case and aggressive growth estimates, a slightly stretch-case Aluminium
demand projection which amounts to a third scenario, which is given below-
• Short-term (2024-2030): 8.5 MT by FY30
• Medium-term (2031-2040): 18 MT by FY40
117 The Path to 2075 — Slower Global Growth, But Convergence Remains Intact, Goldman Sachs, 06-Dec-2022, last accessed
on 01-Oct-2024
118 Indian economy by 2050: In pursuit to achieve the $30 trillion mark, EY-India, Aug 25, 2022, last accessed on 01-Oct-2024
Vision Document on Aluminium Metal for India 113• Long-term (2041-2047): 28 MT by FY47
According to the CRISIL report on ‘Aluminium recycling in India’, the demand for Aluminium in India is
expected to reach 7.3 MT by 2030119. On the other hand, the Confederation of Indian Industry (CII)
projects the demand to be 8 MT by 2030120. Our forecast aligns well with these estimates, indicating a
robust growth trajectory for Aluminium demand in the country. By considering both CRISIL’s and CII’s
projections, our balanced forecast of 8 MT by 2030 reflects that the projection is realistic.
According to the Aluminium demand forecast, India's per capita Aluminium consumption is expected to
see significant growth over the coming decades. Starting from 3.5 kg in FY24, it is projected to increase
to 5.6 kg by FY30. This upward trend is anticipated to continue, with per capita consumption reaching
11.2 kg by FY40 and further rising to 16.9 kg by FY47. This substantial increase reflects the growing
demand for Aluminium in various sectors and the country's focus on expanding its Aluminium production
capabilities.
Per Capita Consumption (Actual) (Kg) Per Capita Consumption (Forecasted) (Kg)
16.9
11.2
5.6
2.7 2.4 2.8 3.1 3.5
FY20 FY21 FY22 FY23 FY24 FY30 FY40 FY47
Figure 79: Per capita Aluminium consumption forecast
28
Actual consumption (MT) Forecasted consumption (MT)
18
8.5
3.4 3.9 4.5 4.9
FY 21 FY 22 FY 23 FY 24 FY 30 FY 40 FY 47
Figure 80: Domestic Aluminium consumption forecast
Assumptions
i. Outlier data or data of years known to have issues (e.g. COVID years) were removed for
calculation of average sector wise GDP elasticity of Aluminium demand.
119 Aluminium recycling in India, CRISIL, Feb 2022
120 Vision and Strategy for the Indian Aluminium Sector, Confederation of Indian Industry
Vision Document on Aluminium Metal for India 114ii. For high growth potential sectors like transportation & electricity, the GDP elasticity of
Aluminium demand will increase in the long term.
iii. No major disruptions that could drastically alter Aluminium demand are considered.
iv. The analysis assumes a supportive policy environment that encourages industrial growth and
infrastructure development.
v. The global Aluminium market remains stable, with no significant supply chain disruptions or
price volatility.
6.2.3 Growth Drivers121
Total domestic consumption of Aluminium is growing at a CAGR of ~7% from FY09 onwards till FY24,
from 1.7 MT to 4.95 MT. Product innovations, the introduction of new alloys, emerging new technologies
in product markets, shift from other metals to Aluminium in various applications, have all favored the
growth of Aluminium industry.
Electrical is the major user of Aluminium products accounting for 48% of total usage followed by
transportation at 16% at FY24. Other key segment users include building & construction, packaging,
consumer durables & machinery & equipment.
Figure 81: Aluminium demand growth by sectors (MT)
By FY47, Transportation and Electrical sectors will be major growth drivers accounting for 64% of
demand growth from FY24 to FY47. Building & Construction (B & C), Packaging sector will contribute
to 22% of demand growth. Rest of the demand growth will be contributed by Consumer durables,
Machinery & Equipment (M & E) and other end-use sectors.
The Critical growth drivers for the increase in the Aluminium demand are (details provided in Annexure
5):
121 Outlook for the Indian Aluminium Industry, AL Circle
Vision Document on Aluminium Metal for India 115Table 11: Sector-wise growth drivers
Al.
Aluminium
End-use demand
consumption Drivers for growth in Aluminium consumption
sector growth
share (2023)122
potential
The usage of Aluminium in the packaging sector is
projected to grow from 0.2 MT in FY24 to 0.4 MT in
FY30 and 1.7 MT in FY47, with a growth rate of 10%
from FY24 to FY30 and 12% from FY30 to FY47.
The Indian packaging market, expected to reach
USD 204 billion by 2025, registering a CAGR of 26%
5% Medium from 2020 to 2025, has seen a 200% increase in
consumption over the past decade due to rising
Packaging
consumer markets in processed food, beverages,
personal care, and pharmaceuticals. This growth is
further driven by government initiatives to phase out
single-use plastics, aligning with consumer demand
for sustainable packaging.
The transportation sector’s Aluminium consumption
is projected to grow from 0.70 MT in FY24 to 1.4 MT
in FY30 and 4.9 MT in FY47. India, a major player in
heavy vehicle production, has a diverse auto
industry driven by two-wheelers and passenger
cars, with the market value expected to grow from
USD 126.67 billion in 2024 to USD 187.85 billion by
2029. Despite a dip in manufacturing post-FY19 due
to economic challenges and the COVID-19
pandemic, the industry has rebounded strongly. The
sector is poised for significant growth, with
16% High
substantial investments and a focus on increasing
Transport vehicle exports. The automotive industry’s shift
towards lightweight materials for better fuel
efficiency and the increasing production of electric
vehicles (EVs) are also significant factors. The
government’s FAME scheme to promote EV
adoption is also a key driver. Also, boosting
Aluminium usage through projects like lightweight
Aluminium-bodied trains, metro rail networks, and
energy-efficient wagons may further drive the
demand.
122 AL Circle estimates
Vision Document on Aluminium Metal for India 116Al.
Aluminium
End-use demand
consumption Drivers for growth in Aluminium consumption
sector growth
share (2023)122
potential
Aluminium consumption in this sector is projected to
grow from 0.8 MT in FY24 to 1.4 MT in FY30 and 4.8
MT in FY47. Rapid urbanization and infrastructure
development, including smart cities and
modernization projects, are creating substantial
16% Medium demand for Aluminium in construction due to its
Building & durability and versatility. The Indian government’s
Construction
infrastructure initiatives, such as the National
Infrastructure Pipeline, Smart Cities Mission, and
100% FDI in construction projects, are expected to
significantly boost Aluminium demand.
Aluminium usage in India’s electrical sector is
projected to grow from 2.4 MT in FY24 to 4.0 MT in
FY30 and 12.9 MT in FY47. Its high structural
integrity, lightweight nature, and excellent
conductivity make it essential for electrical cables,
busbars, transmission lines, motors, and more. The
47% High power sector’s Aluminium demand is driven by
transmission and distribution lines, renewable
Electrical
energy projects, and infrastructure development.
Additionally, Aluminium is crucial in LED lighting and
electric fans, with significant market growth
expected in these areas due to its desirable
properties.
Aluminium usage in the Machinery & Equipment
sector is projected to grow from 0.4 MT in FY24 to
0.6 MT in FY30 and 2.0 MT in FY47. Offset printing,
a major user of Aluminium plates, maintains its
7% Low
relevance within the industry, but its growth may be
Machinery &
impacted as digital methods gain popularity. The
Equipment
demand for extrusions is expected to rise from
Ventilator industry.
Aluminium usage in the Consumer Durables sector
is projected to grow from 0.3 MT in FY24 to 0.50 MT
in FY30 and 1.5 MT in FY47. The growing middle-
class population and rising disposable incomes are
leading to increased consumption of consumer
6% Low durables, which often contain Aluminium
Consumer
components. The cookware market is driven by
durables
increased consumer spending and population
growth, while the refrigerator and washing machine
markets benefit from urbanization and rising
incomes. The air conditioner market is expanding
Vision Document on Aluminium Metal for India 117Al.
Aluminium
End-use demand
consumption Drivers for growth in Aluminium consumption
sector growth
share (2023)122
potential
due to construction demands, and the electronics
sector is growing with the ‘Make in India’ initiative,
all boosting Aluminium demand.
Aluminium usage in the Others (Aerospace,
Defence) sector is projected to grow from 0.14 MT
in FY24 to 0.2 MT in FY30 and 0.3 MT FY47. The
sector’s growth is driven by increased air travel, a
wealthier middle class, and the ‘Make in India’
campaign, which boosts domestic production and
investment in aerospace and defence, reducing
3% Low
Others reliance on foreign procurement. The aerospace and
(Aerospace, defence sectors in India are set to boost Aluminium
Defence)
consumption due to the metal's critical role in aircraft
and military hardware manufacturing. With India's
increasing focus on self-reliance in defence
production, the demand for Aluminium in these
industries is expected to rise significantly.
6.3 Supply Forecast in Short Term (2030) and Long
Term (2047)
China's Export 1.4% 0.01% 29.8% 12.6%
Share in Global
Trade Volume
Total Global
Trade 67.6
Global Trade (MT) 28.2 12.2 27.1
MT
India's Export
Share in Global 6.9% 0.1% 2.3% 3.8%
Trade Volume
Primary Aluminium Scrap Downstream
Figure 82: Global Aluminium Trade Scenario, 2023 (Volume wise)
Vision Document on Aluminium Metal for India 118China's Export 15.0%
Share in Global 1.4% 0.01% 24.4%
Trade Value
Total
Global Trade
72.2 21.3 139.5 Global
(Bn USD)
Trade 233.1
BnUSD
India's Export
Share in Global 6.6% 0.1% 1.8% 3.1%
Trade Value
Primary Al. Scrap Downstream
Figure 83: Global Aluminium Trade Scenario, 2023 (Value Wise)
As of 2023, China commanded a significant 12.6% share of the global Aluminium trade volume, which
totaled 67.6 MT for the year. In contrast, India’s export market share stands at 3.8% of the total global
Aluminium trade volume. Notably, 76% of India’s Aluminium exports volume consist of primary
Aluminium, with only 24% being downstream products. Conversely, China’s export composition is 5%
primary Aluminium and 95% downstream products. In terms of value, India and China exported
Aluminium and Aluminium products worth USD 7.3 billion and USD 35 billion, respectively in 2023. The
focus of China on downstream exports makes the imbalance even more stark in terms of value.
Considering contribution of other developed economies to grow in the future Aluminium trade, India’s
projected share in Global trade volume in Aluminium can be considered to 10% by 2047. To achieve a
10% volume share in 2047 from 3.8% at 2023, in the global Aluminium market by 2047, India Aluminium
export is projected to be 3.8 MT by FY30, 6.9 MT by FY40 and 9.1 MT by FY47. Correspondingly,
India’s Aluminium metal production capacity should be 12 MT, 25 MT and 37 MT by FY30, FY40 and
FY47.
To meet its export targets, India may explore the Aluminium market in emerging African economies
such as Nigeria and Egypt, projected to be the 5th and 7th largest economies by 2075, respectively123.
In 2023, African nations accounted for approximately 4% of global downstream product imports, a figure
expected to rise due to limited downstream production capacity in the region.
123 The Path to 2075 — Slower Global Growth, But Convergence Remains Intact, Goldman Sachs, 06-Dec-2022, last accessed
on 01-Oct-2024
Vision Document on Aluminium Metal for India 11937
Actual Forecast
9.1
25
6.9
12
28.0
3.8
18.0
2.2 2.0
8.5
4.5 4.9
FY23 FY24 FY30 FY40 FY47
Domestic Consumption (MT) India's Al. Export (MT)
Figure 84: Forecast of India's Aluminium metal consumption and export
Vision Document on Aluminium Metal for India 120Focusing on emission reduction, increased scrap recycling is a key lever. The International Energy Agency
forecasts that the share of secondary Aluminium production in total Aluminium production globally will reach
56%124. India’s Aluminium consumption is currently at 4.5 MT. Though, the demand for Aluminium is growing,
driven by sectors like construction, automotive, and packaging, the supply of scrap Aluminium might not be
keeping pace with this demand, leading to potential shortages.
Not only in the immediate term, even in the long-run, India will have to literally move mountains to stay
‘Atmanirbhar’. To meet the projected Aluminium demand, India must ensure a robust supply chain for Bauxite
and Alumina, alongside sufficient capacity for both primary and secondary Aluminium production. Domestic
primary Aluminium production is anticipated to satisfy domestic consumption needs and significantly boost
export volumes. However, securing a steady supply of Bauxite is crucial. As per announced capacity by
Primary Producers, Bauxite requirement is projected to reach at least 42 MT by FY30 whereas Alumina
requirement is projected to reach 14 MT by FY30.
Also, assuming 85% Aluminium content in scrap (based on scrap import quality standard set by different
countries), India’s scrap demand as per announced secondary Aluminium production capacity will be as
follows-
Table 12: Projection of India's Scrap demand125
Announced Secondary Aluminium
Year Scrap demand (MT)
Production Capacity (MT)
FY30 3.5 4.12
In addition to bauxite, alumina and scrap requirement, by FY30, the Indian Aluminium industry will need at
least 15 – 18 GW of power to meet the production requirement.
Assumptions
i. For 1 ton of primary Aluminium production, 6-7 tonnes of Bauxite is required. However, for estimation
6 tonnes of bauxite requirement has been considered.
ii. For 1 ton of primary Aluminium production, 2 tonnes of Alumina is required.
iii. Capacity utilization has been considered at 100% since the demand estimation has taken a
reasonably cautious view of medium-to-long-term demand growth to avoid over-capacity.
iv. Considering contribution of other developed economies to grow in the future Aluminium trade, India’s
projected share in Global trade volume in Aluminium is considered to be 10% by 2047 from current
level of 3.8%. For reference China’s current share in global trade is 12.6%.
v. Aluminium content in scrap is considered to be 85% (based on scrap import quality standard set by
different countries)
vi. Global Aluminium demand has been considered as per International Aluminium Institute production
data.126
vii. Global trade volume of Aluminium may reach 55% of Global Aluminium demand for that year from
the current level of 60%, considering significant increase in global demand.
viii. The ratio of primary to secondary Aluminium in total domestic production is likely to be 70:30 in FY
30, given adequate implementation of the measures outlined in this vision document.
ix. 100% of domestic end-use Aluminium demand is likely to be met from domestic production.
x. 1000 MW generation capacity required for 0.5 MT Aluminium smelter.
xi. Aluminium production via secondary route consumes 95% less energy compared to primary
124 Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach, International Energy Agency, 2023
125 GT Analysis
126 Global Cycle - International Aluminium Institute, last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 121xii. The analysis assumes a supportive policy environment that encourages industrial growth and
infrastructure development.
xiii. The global Aluminium market remains stable, with no significant supply chain disruptions or price
volatility.
Demand Supply Gap Assessment
In response to the increasing domestic demand for Aluminium, domestic producers have initiated expansion
plans for their alumina refineries and Aluminium smelters. NALCO, Hindalco, and Vedanta aim to increase
the country’s alumina refinery capacity by approximately 7 MT and primary Aluminium smelter capacity by
around 3 MT over the next 5 to 6 years.
4.2
Figure 85: Demand-Supply gap in Aluminium capacity by FY30 (in MT)
However, these additional capacities for primary and Secondary Aluminium producers will not suffice to meet
the projected short-term demand, leaving India with a shortfall of another ~1.6 MT of Aluminium by FY30.
Similarly, the secondary sector growth plans are not supported by domestic scrap collection plans. To support
India’s goal of self-reliance, more scrap collection should be focused upon. These gaps will lead to potential
import of Aluminium into the country. Alternatively, the Aluminium industry will go slow in pushing market-
development.
*
4.2
Figure 86: Demand-Supply gap in Domestic Aluminium in FY47 (in MT)
* The existing 2 MT Secondary Steel Capacity which is currently being serviced by imported scrap is included in 6 MT.
Vision Document on Aluminium Metal for India 122India's current domestic self-reliant Aluminium production capacity is 4.2 MT, with secondary capacity of 2.0
MT is largely dependent on imported scrap. With new bauxite capacity, an additional 3 MTPA of primary
Aluminium production can be added. If the rate of mining from existing bauxite reserves can be increased by
50%, another 3 MTPA of primary Aluminium can be supported. Untapped domestic bauxite resources of 4.95
BnT, if proved can support another 14 MTPA of primary Aluminium. By FY47, secondary Aluminium
production from domestic scrap is projected to reach an incremental 6 MTPA. However, to meet the projected
demand of 37 MTPA by FY47, there will still be a shortfall of 7 MTPA, the raw material for which will need to
be met from international sources of bauxite or scrap or discovering more bauxite resources. In any case, the
process of transitioning 4.95 BnT of resources to proven reserves should happen on a mission-mode to
ensure that the pathway to FY47 is clear.
Assumptions
i. 50% production capacity may be enhanced from the operational Bauxite mines.
ii. Out of 4.95 Bn Tonnes of Bauxite resources, 70% may be converted to Reserve with 75%
Metallurgical grade Bauxite.
iii. 30 years of life of mine have been considered for the new Bauxite mines.
iv. Aluminium content in scrap is considered to be 85%
v. Half of the Aluminium consumed annually is assumed to have a 20-year lifespan, while the other
half is expected to last 40 years. Additionally, 10% of the current consumption is considered for
immediate recycling.
vi. No addition in existing Bauxite resource has been considered.
Vision Document on Aluminium Metal for India 1237. Opportunities and Threats
Vision Document on Aluminium Metal for India 1247 Opportunities and Threats
7.1 Opportunities and Future Growth Prospects for Indian
Aluminium Industry
7.1.1 Rising demand for Aluminium products
By 2030, India's Aluminium consumption is going to double. This surge in demand will create numerous
opportunities across various sectors, including automobiles, urban infrastructure, pharmaceuticals, and air
conditioning.
7.1.2 Building downstream capability127
India has the potential to significantly boost its export earnings by expanding its production capacity of
downstream Aluminium products. Despite a notable increase in primary Aluminium production over the past
decade, the rate of value addition within the country remains low. This can be improved by developing new
products and applications through increased investments in R&D activities, which are currently limited.
Primary Aluminium producers in India are focusing on enhancing their downstream production capabilities in
value-added products such as flat rolled products, extrusions, foils and light gauge products. There is also,
significant demand of Aluminium frames for solar panel. These products have applications in various sectors,
including packaging, cans, foils, food and beverages, aerospace, automotive, electronics, transportation,
building and construction, and other industrial segments.
To capitalize on this potential, India needs to develop its capabilities and capacities in value-added
downstream Aluminium products. Currently, the downstream sector is dominated by China, which benefits
from a robust manufacturing ecosystem and infrastructure, despite rising costs. As companies shift their
supply chains away from China, India has an opportunity to benefit from the 'China-plus-one' strategy by
creating a manufacturing ecosystem with skilled labor, particularly in the Aluminium downstream sector.
Compared to China, India's midstream and downstream capacities are still in their early stages, presenting
significant growth potential.
For instance, in FY23, India exported Aluminium and Aluminium products worth USD 7.3 billion. Of this, USD
4.8 billion (65%) was unwrought or primary Aluminium, while 35% were downstream Aluminium products. In
contrast, China exported Aluminium and Aluminium products worth USD 35 billion, with only 3% being primary
Aluminium and 97% being downstream Aluminium products. This indicates that China captures a high share
of the value-added in the supply chain before exporting.
Therefore, there is a substantial opportunity for India to create further downstream capacity domestically,
enhancing its export earnings and capturing more value within the country.
7.1.3 Increasing demand from Automobile sector for lightweight materials and the
expanding electric mobility
Automobile manufacturers are increasingly substituting heavier materials like steel and iron with Aluminium
to increase fuel efficiency, improve performance, reduce carbon emissions, and lower vehicle weight,
especially in electric vehicles. Aluminium's durability, strength, and light weight make it an attractive
alternative.
7.1.4 Beverage Packaging Market
Aluminium is becoming the preferred material for beverage packaging due to its sustainability and
recyclability. The shift from materials like glass, steel, and Polyethylene Terephthalate or PET plastic to
Aluminium, along with the introduction of new beverage products such as energy drinks, canned cocktails,
spiked seltzers, and sparkling waters, is driving demand for Aluminium packaging.
127 ITC Trademap, Company Annual Reports, last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 1257.1.5 Material Substitution Trends
While carbon fiber and plastics are other lightweight options, their high cost and limited recyclability make
Aluminium a more competitive choice. This trend is boosting the demand for flat-rolled Aluminium products
across various industries.
7.1.6 Production Linked Incentive Scheme for White Goods128
The Production Linked Incentive (PLI) scheme for white goods in India aims to boost domestic manufacturing
and attract significant investments in the production of air conditioners (ACs) and LED lights. The Government
has sanctioned the Production Linked Incentive (PLI) Scheme for White Goods, specifically targeting air
conditioners and LED lights, to be executed from FY22 to FY29, with a financial allocation of INR 6,238
crores. High Value Intermediates products of Acs made with Aluminium Foil are also covered under the
scheme. Under the PLI scheme, companies like Hindalco Industries Ltd. are developing products like coated
AC fins which will boost the Aluminium demand.
7.1.7 Recycling and circular economy
Due to its excellent recycling properties, Aluminium could become a cornerstone of the circular economy. As
consumption is expected to grow, the amount of post-consumer Aluminium will also increase. Utilizing
recycled metals will help satisfy consumer demand while decreasing the need for virgin metals. Companies
such as Hindalco are working on establishing a can recycling facility.
7.1.8 Emerging applications for the specialty Alumina
Specialty Alumina is increasingly in demand due to evolving industry requirements, leading to the
development of advanced products in both existing and emerging markets. It is used to produce high
performance refractory materials, advanced ceramics components, flame retardants. Also, the demand for
high-purity Alumina has been on the rise, driven by new applications such as lithium-ion batteries and
semiconductors.
7.2 Major Issues Faced by Indian Aluminium Industry
7.2.1 Rise in import of Aluminium scrap poses problem for primary Aluminium
players
Aluminium scrap is being imported by more than 1000 odd traders/ importers into India. There has been
significant import of Aluminium scrap for the last 3-4 years due to policy measure taken by other importing
countries like China & Malaysia to restrict metal scrap imports into their respective nations129. As on today,
India is the largest importer of Aluminium scrap in the world, importing major tonnages from countries like
USA, UK, UAE, Saudi Arabia etc. Due to the increase in scrap import, the ratio of total import of Aluminium
to Domestic sales increased from ~40:60 in FY 12 to 60:40 in FY 22. Aluminium imports cater to ~60% of
domestic demand, growing at a CAGR of 9% in the last decade (FY 11 to FY 24)130. India’s Aluminium share
through scrap route has increased with a CAGR of ~11% from 0.47 MT in 2010-11 to 1.77 MT in 2023-24.
This is due to policy measure taken by other importing countries like China & Malaysia to restrict metal scrap
imports into their respective nations and the supply diversion has been towards India.
128 Production Linked Incentive Scheme (PLI) for White Goods (Air Conditioners and Led Lights) Manufacturers in India, e-gazette
notification, dated 16th April 2021, DPIIT, Ministry of Commerce and Industry
129 China, Malaysia's scrap metal U-turn a golden opportunity for India – official, Eileen Soreng and Mai Nguyen, 24-Nov-2021, last
accessed on 03-Oct-2024
130 Import Export databank, Ministry of Commerce and Industry, Govt. of India, last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 1263.00 70%
61% 60%
2.50
49%
52% 57% 52% 53% 54% 58% 58% 57% 55% 60% n o itp
)T 46% m
M n i( y titn
a u
Q
tr
o112 ... 050 000 4 22 2%
%
26% 27% 28%
31%
27% 28%
31% 34% 36% 40% 43% 39% 36% 345 000 %%% u s n o c la
to t
n i
tr
o
p 20% p
m m
I
0.50
10%
i
fo
%
0.00 0%
2010-112011-122012-132013-142014-152015-162016-172017-182018-192019-202020-212021-222022-232023-24
Primary Aluminium import Scrap import Downstream products import
Market share: Total import Market share: Scrap import
Figure 87: Market share of scrap import in India's Aluminium consumption
Secondary Aluminium is derived from recycled Aluminium scraps, which can originate from sources like old
soda cans and car parts. In India, the import duty on Aluminium scrap is currently only 2.5%, significantly
lower than the 7.5% duty imposed on primary Aluminium. This creates an incentive for importing scrap.
7.2.2 High incidence of taxes and duties leading to higher input cost for Aluminium
industry131
India stands out as the most expensive producer of Aluminium among major global players, including China,
Canada, Russia, the Middle East, and Norway. This cost disparity can be attributed to several factors, such
as high cost of power due to rising Coal prices, significant Coal Cess, increased Electricity Duty, an inverted
duty structure for essential raw materials, and elevated logistics expenses.
The Aluminium industry faces significant challenges due to the heavy burden of duties and taxes, which can
account for as much as 14% of production costs. This substantial financial impact affects Aluminium
producers.
Table 13: Impact of taxes/ duties/ cess on Primary Aluminium production cost
Impact on
Sp. Aluminium
Tax/ Cess/
Particulars Consumption/ COP Remarks
Duty
ton of Al (USD/ton of
Al)
Huge disadvantage to highly
GST
power intensive industries
compensation INR 400/ tonne 12 tonnes 58
like Aluminium (applicable
cess of Coal
on domestic sales)
Royalty -14%, Representative price (May
Royalty, NMET NMET-2% of
12 tonnes 39 2024) of G13 grade Coal-
and DMF on Coal Royalty, DMF-
INR 1710/ ton of Coal
10% of Royalty
INR 0.55/ Electricity duty is INR 0.55/
Electricity duty 14,500 kWh 96
kWh132
kWh for CPP in Odisha
131 Industry sources
132 Odisha hikes electricity duty for captive power plants, Sujit Kumar Bisoyi, 11-May-2017, last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 127Impact on
Sp. Aluminium
Tax/ Cess/
Particulars Consumption/ COP Remarks
Duty
ton of Al (USD/ton of
Al)
(Increased from INR 0.30/
kWh to INR 0.55/ kWh in
2017 for CPPs in Odisha)
For G13 grade Coal, price
difference is INR 163/ ton
.CIL notified price (dated
Higher Coal
INR 163/ ton of
prices for non- 12 tonnes 24 31st May 2023) is INR
Coal
power sector 827/tonne for power sector
and INR 990/tonne for non-
power sector
Avg. LME price of Al for FY
23-24 is USD 2202/ton
Avg. Al O % in Bauxite-
2 3
42.5%
Royalty, NMET & USD 3.3/ tonne
6 tonnes 20 Royalty= 0.6%*52.9%* Avg.
DMF on Bauxite of Bauxite
Al O % in Bauxite* Avg.
2 3
LME price of Al
DMF=10% of Royalty
NMET=2% of Royalty
Evacuation Facility
INR 60/ tonne of INR 60/ton of Coal from
Charges on Coal by 12 tonnes 9
Coal August 2021
Coal India
Basic Custom
Import Duty on Duty (BCD): Average of available price of
Calcined Petroleum 7.5% and social 383 kg 19 CP coke for FY 23-24 is INR
(CP) Coke welfare cess: 50,847 per ton
10% of BCD
Basic Custom Average of available price of
Import duty on Duty (BCD):
Aluminium Fluoride for FY
Aluminium 7.5% and social 19 kg 2
23-24 is INR 1,09,530 per
Fluoride welfare cess:
ton
10% of BCD
RPO for 2024-25 is 29.91%.
INR 0.33/ kWh cost
Renewable considered based on avg.
Purchase 29.91% RPO 14,500 kWh 17 traded price of Renewable
Obligation (RPO)
Energy Certificate (REC) at
Indian Energy Exchange
during Jan-Mar 2024
Total impact of taxes/ duties/ cess on Primary
284 14% of Cost of Production
Aluminium production cost
Vision Document on Aluminium Metal for India 128Impact on
Sp. Aluminium
Tax/ Cess/
Particulars Consumption/ COP Remarks
Duty
ton of Al (USD/ton of
Al)
Considering COP of USD
2010/ ton of Aluminium
(excluding depreciation)133
Note-
• USD to INR exchange rate considered 82.78 INR/ USD which is average exchange rate for FY 23-24
• Specific consumption of Raw materials and prices of Calcined Petroleum coke and Aluminium Fluoride is taken from Industry
sources
• Cost of Renewable Energy Certificate might increase further as the demand increases
Impact of New Tax Regulations on Aluminium Production Costs
Recent Developments
The recent Supreme Court ruling has empowered Indian states to impose taxes on mining activities. This
decision has significant implications for the mining sector, particularly in states like Odisha and Jharkhand,
which are rich in mineral resources.
ORISED Act, 2004134
Under the Orissa Rural Infrastructure and Socio-Economic Development (ORISED) Act, 2004, the tax on
mineral-bearing land is capped at 20% of the annual value of the land. This tax is aimed at generating revenue
for rural infrastructure and socio-economic development in Odisha. However, the ORISED Act needs to be
reinstated by the Supreme Court before Odisha Govt. can start collecting the tax.
Jharkhand Mineral-Bearing Land Cess Bill, 2024135
The Jharkhand Mineral-Bearing Land Cess Bill, 2024, that will come into effect after the publication of its
notification in the Official Gazette, introduces a new cess based on the weight of the minerals extracted. The
cess rates are:
• Coal: INR 100 per metric ton
• Bauxite: INR 70 per metric ton
Impact on Aluminium Production Costs
The new tax regulations under the ORISED Act and the Jharkhand Mineral-Bearing Land Cess Bill are set to
increase the cost of Aluminium production in India as the cost of production of coal and bauxite will increase
with the imposition of the taxes. While these measures aim to generate revenue for socio-economic
development, they present significant challenges for the Aluminium industry, which must navigate these
additional costs to remain competitive.
Comparison of Taxes across nations136
Implementation of taxes/levies on coal such royalty, DMF, putting undue burden on industry. A schedule of
cross-country comparison of royalty duties (coal and bauxite) is given below-
Table 14: Royalty and Taxes as percentage of ex-mine coal cost
Country Royalty & taxes as % of ex-mine coal cost
133 Aluminium Smelter Costs League 2023, Wood Mackenzie
134 The Orissa Rural Infrastructure and Socio-economic Development Act, 2004
135 खनिज-धारित-भूनि-उपकि-2024, Jharkhand Vidhan Sabha
136 Need for an Aluminium Policy in India, NITI AAYOG, 2017
Vision Document on Aluminium Metal for India 129India 25-31%
Indonesia 12%
South Africa 0-7%
Australia 7%
Table 15: Royalties and Taxes on Bauxite
Country Royalties and Taxes (Rs/Ton)
India 230
Guinea 50
Brazil 90
Australia 120
Table 16: Present Basic Custom Duty (BCD) of Critical raw materials required for Aluminium production
Commodity HS Code Current Basic Custom Duty
Calcined Petroleum Coke 2713 12 10 7.5%
Raw Petroleum Coke 2713 11 10 10%
Caustic Soda Lye 2815 12 00 7.5%
Aluminium Fluoride 2826 12 00 7.5%
Green Anode/ Pre-Baked Carbon
8545 19 00 7.5%
Anode
Calcined Alumina 2818 20 10 5%
7.2.3 Raw material supply shortages137,138,139
7.2.3.1 Coal
Insufficient quantity allocation for Non-Regulated Sectors
The Ministry of Coal circular for Auction of Linkages, dated 15th February 2016, specifies that Coal should be
distributed in the proportion of 75% for power and 25% for non-power sectors. This directive aims to ensure
a balanced supply of Coal to different sectors, considering their importance and contribution to the country’s
infrastructure and economy. But this directive is not being followed properly, and the Non-regulated sector is
facing issues with coal availability.
There have been instances where industries like the Aluminium sector have faced critical shortages due to
Coal supply policies. For example, in 2021, Coal India Ltd. took decision for stopping/reducing Coal supplies
and rakes for non-regulated sector (NRS), leading to severe Coal shortage situation for Captive Power Plants
(CPPs) of Aluminium producers. A power interruption lasting two hours or longer can cause the molten
137 Aluminium manufacturers write to CIL for resuming coal supplies, Bhavya Dilipkumar (Economic Times), 21-Sept-2021, last
accessed on 03-Oct-2024
138 Aluminium industry stares at critical coal shortage, Construction Week, 30-Aug-2021, last accessed on 03-Oct-2024
139 Industry Sources
Vision Document on Aluminium Metal for India 130Aluminium within the pots to solidify. This situation necessitates a shutdown of the Aluminium production
facility for a minimum of six months, incurring substantial financial losses and significant costs associated
with restarting operations. Moreover, after resuming production, it typically requires about a year to achieve
the targeted level of metal purity, given that the industry relies on a continuous, power-intensive process.
Pricing disparity
Also, there is huge disparity in allocation/ pricing of Coal for Power and Non-Power Sector. CPPs pay ~20%
higher for Coal as compared to IPPs leading to differential pricing for different consumers of the same
commodity. For example, in case of G13 grade Coal, the price difference is INR 163/ ton exists .CIL notified
price (dated 31st May 2023) for G13 grade Coal is INR 827/ton for power sector and INR 990/ton for non-
power sector.
Outdated consumption norms140,141
Latest consumption norms issued by the Central Electricity Authority (CEA) dated 20.07.2021 consider GCV
losses due to stocking, extra moisture and in-transit pilferage. CIL however continues to use the old norms
which do not consider these losses. Hence, the outdated Norms for calculation of Coal requirement for CPPs
leads to significant quantity Loss in calculation of Annual Contracted Quantity (ACQ).
The table below shows that for 1000 MW CPP the Annual Contracted Quantity is 0.4-0.5 MTPA less according
to the existing CIL Scheme Document for Coal Linkage for CPP, 2024.
CIL Scheme Document for
CEA Notified Norms, 2021 Auction of Coal Linkage for CPP,
Difference in
2024
Grade of Coal
Coal Coal Requirement Coal Requirement Requirement
GCV GCV
for 1000 MW CPP for 1000 MW CPP (MTPA)
(kcal/kg) (kcal/kg)
(MTPA) (MTPA)
G10 4,004 4.9 4,300 4.5 0.4
G11 3,719 5.2 4,000 4.8 0.4
G12 3,434 5.7 3,700 5.2 0.5
Note: For calculation of Coal requirement Unit Heat Rate considered for 100 MW to 200 MW units
The coal consumption norms issued by the CEA in 2021 which provided for additional eligibility on account
of the following losses:
• Loss in stock – 85 kcal/kg, as per CERC Tariff Regulations 2019
• Loss due to moisture: 5%, due to difference in GCV (Eq) and GCV (ARB)
• Loss in transit: 0.8%, for non-pit head plants
7.2.3.2 Calcined Petroleum Coke
Low Sulphur Anode Grade Calcined Petroleum Coke is not available in India in adequate quantity. Domestic
demand is 1.7 MTPA from Aluminium and Steel plants, whereas domestic supply is only 0.3 MTPA.
Also, according to Notification No. 68/2023-DGFT dated March 7, 2024, the total permissible import for 2024-
25 is 1.9 MT of Raw Petroleum Coke (RPC) for manufacturing Calcined Petroleum Coke (CPC) and 0.5 MT
of CPC for the Aluminium industry. From 2025-26 onwards, the permissible import will be 1.9 MT of RPC for
140 Central Electricity Authority Notification No. 219/GC/BO/TPPD/CEA/2021/224, dated 20.07.2021
141 Scheme Document for Auction of Coal Linkages in the CPP Sub- Sector Under Tranche VII, CIL, January 2024
Vision Document on Aluminium Metal for India 131manufacturing CPC and 0.8 MT of CPC for the Aluminium industry. This import restriction is creating
hinderance in smelter capacity expansion.
7.2.3.3 Caustic Soda Lye
Aluminium industry is a bulk consumer of Caustic Soda, highly dependent on imports and not able to meet
its demand through domestic sources due to several constraints related to quantity, infrastructure and
logistics. Also, PSUs are not allowed to import Caustic soda as per GoI procurement policy. (Majority of
Caustic Soda production is in Western region (Gujarat, Maharashtra, Rajasthan) while major Alumina
producers are in Eastern region (Odisha, Chhattisgarh, Andhra Pradesh, Uttar Pradesh), resulting in high
logistics costs.
7.2.3.4 Aluminium Fluoride
Domestic demand of Aluminium Fluoride is 70,000 TPA from Aluminium producers, whereas domestic supply
is only 25,000 TPA. 60-70% of requirement of Aluminium Fluoride is imported by Aluminium manufacturing
Plants in India
7.2.4 High logistics cost and unavailability of rakes
Aluminium smelting facilities operate on a continuous process system, necessitating a steady and reliable
provision of essential raw materials. The production of one ton of Aluminium necessitates the transport of
approximately 20 tonnes of these materials142. The scarcity of available railway rakes has led to a significant
accumulation of pending deliveries and elevated logistical expenses, primarily due to increased railway freight
charges for crucial commodities. This situation underscores the critical need for consistent material supply
chains to maintain the smelting operations without incurring excessive costs.
As per Goods Tariff No. 45 (w.e.f. 01.04.2007)143 , Bauxite has been classified as Base Class 160 and
Alumina as 180. Due to this classification, higher freight charges are applicable on Bauxite and Alumina which
are critical raw materials for Aluminium industry.
For example, for 160 Class Train load, Railway freight of Bauxite is INR 843/ ton for 500 km distance, whereas
for 145 Class Train load and for same distance Railway freight of Dolomite is INR 764/ ton. So, due to higher
classification, the freight rate is ~10% more.
Also, primary producers are being forced to take coal through road mode which is costly and also not
environment friendly.
7.2.5 Rising import of primary Aluminium, downstream products
Rising import of primary Aluminium
The import of primary Aluminium saw a significant increase of 31% year-on-year, rising from 214 thousand
tonnes in the fiscal year 2022 to 279 thousand tonnes in the fiscal year 2023. The Middle East was the primary
source of this growth, contributing about 61% of the total increase. Notable exporters included Qatar at 21%,
Bahrain at 17%, Oman at 11%, and the UAE also at 11%. The Middle East’s considerable excess production
capacity, which is due to its low-cost electricity and production that exceeds local demand (with a total
capacity of 5.3 MT against a consumption of only 0.8 MT), leads to a part of this excess being exported and
subsequently dumped in India.144
142 Industry sources
143 Goods Tariff No.45 Pt. I (Vol. II), Indian Railways, 02/03/2007, last accessed on 03-Oct-2024
144 Industry sources
Vision Document on Aluminium Metal for India 13228
31%
42
41 46
129
24
92
130 170
129
160
134
90
61 68
FY 19 FY 20 FY 21 FY 22 FY 23
With FTA signed countries Middle East Others
Figure 88: India's primary Aluminium import in kT
The rising import of primary Aluminium in India presents challenge for domestic primary Aluminium producers
like increased competition in domestic market.
Pricing of unwrought Aluminium poses significant challenge for the Indian downstream Aluminium
industry145
Over 60% of value addition in the Indian Aluminium industry occurs at the downstream sector level, which
also contributes significantly to the industry's output and employment. This sector encompasses a diverse
group of producers who manufacture a wide range of products, including Aluminium extrusions, flat rolled
products, castings, foil, wire, slugs, powder, lacquers, and other processing applications. These semi-finished
Aluminium products are then sold to various customers who use them in further manufacturing processes.
However, the downstream sector has been facing challenges due to the rising costs of its primary raw
material, unwrought Aluminium, which has been increasing in value and, as a result, reducing the sector's
competitiveness.
The cost of raw Aluminium significantly impacts the competitive edge of India’s downstream Aluminium
sector. The sector’s main challenge is the inflated cost of primary Aluminium used to create higher-value
products. Local primary Aluminium manufacturers set their domestic prices based on import parity, factoring
in a 7.5% Basic Custom Duty (BCD) and an additional 0.75% social welfare surcharge (which is 10% of the
BCD). This pricing strategy leads to extra income for primary producers through Indian import tariffs, while
the downstream industry pays more for the essential raw materials, resulting in excessive expenditure. In the
year 2022, the downstream sector in India paid around 470 million USD more than necessary to Indian
primary producers. This financial anomaly bolstered the profits of the smelters at the expense of the
downstream sector’s growth and investment. Downstream manufacturers, who focus on producing higher-
value products, face financial strain due to the necessity of purchasing primary Aluminium at these elevated
import parity prices, contributing to their profit decline.
On the other hand, due to volatility in the LME prices, have at many times reduced the margins for primary
Aluminium players also. Huge investments are required for setting up primary Aluminium smelters. Any
change in pricing will discourage the primary producers. It may not be right to interfere in the play of market
forces by artificial price controls or fiscal interventions. In the previous section it can be seen that there are
only 3 primary producers in India compared to China, Brazil and USA in its heydays. As more primary players
come into the sector, this will automatically bring in competition and ensure moderate pricing of primary
Aluminium to the secondary and downstream sector.
145 Assessing The Impact of CBAM and Tariffs in the Indian Aluminium Industry, IIFT, June 2023
Vision Document on Aluminium Metal for India 133The calculation of overpayment can be shown with an illustration-
i. Primary Aluminium producers add USD 20-30 per ton of Aluminium as premium
ii. Import duty on primary Aluminium is 8.25% (7.5% basic tariff + 0.75% of social welfare surcharge) which
constitutes to USD 182 per ton of Aluminium (considering avg. LME price of Aluminium for FY 23-24 is
USD 2202/ton)
The excess payment by downstream manufacturers varies with the fluctuating London Metal Exchange (LME)
Aluminium prices. The presence of import tariffs on primary Aluminium allows for an increase in the domestic
selling price of Aluminium. The cost of primary Aluminium represents a significant portion- up to 60% of the
total production costs for finished Aluminium goods in the downstream sector. This high-cost component
renders the end products less competitive both in local and international markets.
Rising import of downstream products146
As per the data from ITC Trademap, there has been a consistent rise in the import of downstream Aluminium
products to India since 2014, growing from 343 thousand tonnes in 2014 to 562 thousand tonnes in 2023,
marking a 64% increase. This growth persisted despite a temporary dip in 2020 due to the disruptions caused
by the COVID-19 pandemic. The proportion of downstream Aluminium product imports has seen a rapid
surge. A significant portion of this, ~70%, is attributed to imports from China, with Aluminium foil and plates
making up about 65% of total downstream imports. This influx of imports has posed challenges to India’s
domestic Aluminium industry. The Indian domestic downstream industry is losing its market share steadily
due to rising imports of Aluminium products.
0.64
0.57 0.56
0.53
0.46
0.44
0.39 0.39 0.39
0.34
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Figure 89: Rising import of downstream Aluminium products in India (MT)
Rising import of Aluminium Articles from ASEAN147,148
India is encountering multiple challenges in its Aluminium trade with ASEAN countries under the existing Free
Trade Agreement (FTA). The agreement has predominantly favored ASEAN nations, creating a notable trade
imbalance. India’s import of Aluminium from ASEAN nations have risen swiftly.
A significant issue for India is the potential misuse of the trade agreement. There have been cases where
goods from non-ASEAN countries are routed through ASEAN nations to India, bypassing the intended
benefits of the FTAs. This practice undermines the trade advantages that India is supposed to gain.
In the FTA, India placed all items in the Normal Track except for 760110 (Unwrought Aluminium, unalloyed).
However, Malaysia has imposed excessively high Most Favoured Nation (MFN) duties, ranging from 25% to
30%, on tariff lines between 7604 and 7608. This high duty structure severely restricts the ability of India's
downstream industry, particularly Micro, Small, and Medium Enterprises (MSMEs), to export their products.
146 Assessing The Impact of CBAM and Tariffs in the Indian Aluminium Industry, IIFT, June 2023
147 In trade renegotiation with ASEAN, India eyes higher exports, lower deficit, Policy Circle, 11-Mar-2024, last accessed on 03-Oct-
2024
148 Industry Sources
Vision Document on Aluminium Metal for India 134Similarly, Indonesia has placed downstream Aluminium products under the Sensitive Track, making it difficult
for Indian exporters to access the Indonesian market. These tariff lines should be reviewed to allow better
market access for India's downstream industry.
Furthermore, Indonesia is on a massive expansion spree in manufacturing primary Aluminium, with
production capacity increasing from 261 kTPA to 636 kTPA between 2018 and 2023 and plans to expand
further to 1.5 MTPA by 2027. Malaysia has also increased its production capacity of primary Aluminium from
760 KTPA to 1.1 MTPA during the same period. With increased supply of primary Aluminium from these
countries, it might be challenging for Indian Aluminium producers to compete.
Table 17: Major Imports from Malaysia, Indonesia and Thailand
Import in FY Import in FY Increase in
Country Product HS Code
16 (Tons) 24 (Tons) Import
Primary Aluminium
760110 1,012 5,565 5.5x
(not alloyed)
Malaysia Primary Aluminium
760120 63,239 83,502 1.3x
(alloyed)
Scrap 760200 11,420 32,749 2.9x
Scrap 760200 4,867 6,032 1.2x
Thailand
Aluminium plates,
760612 124 12,468 101x
sheet
Aluminium Wire 760511 0 2529 -
Indonesia 760612 86 252 3x
Aluminium plates,
sheet
760692 34 1861 55x
Table 18: Current Basic Custom Duty on Aluminium articles
HS Codes Description Current Basic Custom Duty
7601 Primary Aluminium 7.5%
7603-7607 Downstream Aluminium Products 7.5%
7608-7616 Downstream Aluminium Products 10.0%
7.2.6 Impact of CBAM on domestic industry149,150
In May 2023, the European Union (EU), which is the second-largest consumer of Aluminium globally, adopted
the Carbon Border Adjustment Mechanism (CBAM). This mechanism imposes a tax on imports like
Aluminium, electricity, cement, fertilizer, hydrogen, and iron and steel products into the EU, based on the
carbon emissions produced during their manufacture. Starting from January 1, 2026, the CBAM will mandate
that importers of specific goods that consume a lot of energy, such as Aluminium products, pay a tax that
149 EU carbon tax to have limited Impact on India's Aluminium exports, Saurav Anand (Economic Times), 09-Apr-2024, last accessed
on 03-Oct-2024
150 India’s Aluminium exports to European Union set to become unviable on CBAM dent, ET Energy World, 13-Jun-2023, last
accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 135reflects the embedded carbon cost equivalent to the EU Emissions Trading System (ETS) emissions permit
prices. This may adversely impact primary Aluminium more than secondary Aluminium sector.
In the fiscal year 2023, India exported approximately 0.7 MT of primary Aluminium to European Union,
representing approximately 29% of India’s total merchandise exports to the EU, which are valued at
approximately USD 75 billion. The anticipated carbon taxes under CBAM are expected to range from USD
50 to 140 per tonne of Aluminium from 2026 to 2034, amounting to about 2-6% of the price of Aluminium.
These projections do not consider indirect emissions, which make up about 80% of the total emissions from
producing primary Aluminium in India. If indirect emissions were to be factored into the tax calculations, the
impact could be drastic, potentially constituting around 27-30% of the Aluminium price. The cost impact is
calculated based on current carbon prices; cost impact may increase up to 70% of Aluminium price. This is
because India's Aluminium sector heavily depends on Coal-powered plants, in contrast to the EU, which
mainly uses hydroelectric power. Thus, India’s primary Aluminium export will be hit hard by CBAM regulation
once it is fully implemented by EU. This will result in the diversion of exports to other markets leading to
further competition in those markets. India is currently devising its own carbon border tax mechanism which
may help on the hand and complicate matters on the other if other countries start devising their own means.
7.2.7 Challenges in securing Round-the-clock Renewable power151
Aluminium smelters are required to meet Renewable Purchase Obligations (RPOs) to support the country’s
renewable energy goals. The RPO Trajectory published dated 22nd July 2022 mandates that 29.91% of the
total energy consumed by these smelters must come from renewable sources and this percentage will
increase to 43.33% by 2030152. The Indian Aluminium industry faces several significant challenges in
transitioning to renewable power sources. These challenges stem from the unique operational requirements
of Aluminium production, geographical constraints, and economic factors. Here is a detailed overview:
Continuous Power Supply Requirement
Aluminium production is highly energy intensive. Unlike steel production, Aluminium smelting requires a
continuous, 24*7 power supply without voltage fluctuations. Any power outage, even for a short duration, can
lead to significant operational disruptions and prolonged recovery times, sometimes extending up one to two
years. Wind and solar power are inherently variable, depending on weather conditions and time of day. This
intermittency makes it difficult to ensure a constant power supply to high energy-sensitive sectors.
PPA Related Disputes
Some primary Aluminium producers have already set up RE projects in states like Andhra Pradesh and
Rajasthan. However, the signing of PPAs is often delayed due to approval issues from regulatory
commissions, pending court cases, and unviable tariffs offered by discoms
Lack of Perennial sources for Hydro Power
Unlike regions such as the EU and Canada, India lacks perennial sources of large hydro power, which are
reliable and consistent renewable energy sources. If India could divert greener sources of power (such as
hydro power etc.) towards industries and use Coal-based power primarily for the domestic sector, it could
help India’s price competitiveness.
Land Acquisition for Solar Parks
Setting up large solar parks in India faces significant challenges due to land acquisition issues. Unlike China,
where land acquisition is more streamlined, India’s regulatory and social landscape makes it difficult to
acquire large tracts of land for solar projects.
Limitations of Wind Power
Wind power in India suffers from low-capacity utilization and erratic generation patterns, making it unreliable
for the continuous power needs of Aluminium smelters.
151 Industry sources
152 Renewable Purchase Obligation (RPO) and Energy Storage Obligation trajectory till 2029-2030, Government of India, Order No.: F.
No. 09/13/2021-RCM, 22-Jul-2022, last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 136High Capital Costs for Storage Solutions
Pump storage and battery plants, which could provide backup power, are highly capital-intensive. This adds
to the already large capital expenditure required for Aluminium production.
Nascent Stage of Alternative Technologies
Technologies like hydrogen power and other alternative energy sources are still in the early stages of
development and are not yet viable for large-scale industrial use.
Location Disparities
Solar parks are predominantly located in northern India, and wind farms are situated in the western regions
or along coastlines. In contrast, Aluminium smelters are typically based near mineral reserves in eastern
India, leading to logistical challenges in power distribution.
Economic Unviability of Power sourcing from different sources
DISCOMs (Distribution Companies) charge Cross Subsidy Surcharges (CSS) when consumers opt for open
access to purchase electricity from sources other than the local DISCOM. Thus, scheduling different sources
of power is economically unviable due to high cross-subsidy surcharges imposed by DISCOMs, along with
transmission and other scheduling charges. These additional costs make it difficult for Aluminium producers
to switch to renewable energy sources.
7.2.8 Substitution Threat to Aluminium
When evaluating substitutes for Aluminium, several key characteristics are considered. Factors such as
availability, cost, quality, and technological advancements play a crucial role in selecting the best alternatives.
Steel: Steel surpasses Aluminium in terms of tensile, compressive, and yield strength. It is also more cost-
effective. For instance, High Strength Low Alloy (HSLA) steel and Advanced High-Strength Steel (AHSS)
provide greater strength at a lower cost than Aluminium. Technological advancements, such as Direct
Reduced Iron (DRI) using hydrogen instead of carbon, significantly reduce CO emissions. This “green steel”
2
is becoming increasingly attractive to industries focused on sustainability. Consequently, sectors like
construction and automotive are actively turning to steel153.
Copper: Factors such as higher electrical conductivity, thermal conductivity (60% higher than Aluminium),
superior durability and reliability, and greater tensile strength make it a viable substitute for Aluminium. These
properties make it ideal for commercial wiring, as it can carry more current with less resistance and energy
loss. Additionally, it is suitable for plumbing and roofing applications, as well as industrial machinery like heat
exchangers. 154,155
Carbon Fiber: It boasts a superior strength-to-weight ratio and excellent fatigue resistance, maintaining
integrity through repeated loading cycles. This makes it highly suitable for high-performance applications in
aerospace and sporting goods. The strength of carbon fiber is not uniform; it varies with the fiber’s orientation,
allowing for customization of component strength by adjusting the fiber weaving. This directional strength is
advantageous for parts subjected to multidirectional forces. Additionally, its corrosion resistance makes it
ideal for use in marine vessels.156
Titanium: Its superior strength-to-weight ratio, corrosion resistance, temperature tolerance, and
biocompatibility make it a better substitute than Aluminium. These properties make it ideal for applications in
aerospace, automotive, marine, jet engines, industrial processes, medical implants and prosthetics. 157,158
153 Aluminium vs steel strength weight and applications compared, Endura Steel Website, last accessed on 10-Aug-2024
154 Copper Wire vs. Aluminium Wire - Aluminium Magazine, last accessed on 10-Aug-2024
155 Aluminium and Copper – Comparison – Properties, Material Properties, last accessed on 10-Aug-2024
156 Carbon Fiber vs Aluminium: Strength & Weight Debate, 22-Feb-2024, last accessed on 03-Oct-2024
157 Titanium vs. Aluminium: Which Metal Is Better? – PROTO, last accessed on 10-Aug-2024
158 Aluminium and Titanium - Comparison - Properties, Material Properties, last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 137Magnesium alloys: It is 33% lighter than Aluminium, offers superior corrosion resistance, and has better
machinability, which reduces costs and time. Additionally, it absorbs energy more effectively under dynamic
loading. These advantages lead to its widespread use in automotive, aerospace, and electronics, including
laptops and smartphones. 159,160
7.2.9 Geopolitical Risks161
The Russia-Ukraine war caused a significant shock to the global economy, particularly affecting energy and
food markets by tightening supply and driving prices to unprecedented levels. For instance, the price of
Aluminium on the London Metal Exchange soared to an all-time high of USD 4,000 per metric ton in early
March 2022, compared to a monthly average of USD 3,224 in February 2022. This price surge led many
Aluminium producers to restart or increase their production capacities, potentially resulting in an oversupply
in the market in the coming months. The unusually high Aluminium prices also negatively impacted demand,
as consumers began seeking alternative materials.
Additionally, the war has caused a sharp increase in the price of imported Coal, leading to excessive demand
for domestic Coal in India and creating shortages for Aluminium producers. This situation could disrupt power
supply to Aluminium smelters, forcing production cuts.
The spike in oil prices due to the Russian military operations affected not only Aluminium prices but also the
prices of all commodities. The Brent Crude Oil Index rose from around USD 80 per barrel at the beginning of
2022 to about USD123 per barrel by March 7, 2022. Similarly, supply chain disruptions caused by the invasion
increased the overall cost of shipping operations. The Clark Sea Daily Rate Charter Index showed a rise in
shipping rates from ~ USD 30,000 per 40-foot container at the end of January 2022 to over USD 40,000 in
March 2022. Any further escalation of geopolitical tensions, such as the Russia-Ukraine war or potential US-
China conflicts, could lead to high volatility in Aluminium supplies and prices, global inflation, and disruptions
in trade and supply chains.
159 Magnesium alloys - uses, applications and benefits, Keronite, 12-Apr-2022, last accessed on 03-Oct-2024
160 Magnesium Alloys: An Alternative for Aluminium in Structural Applications, Scientific.Net, last accessed on 03-Oct-2024
161 Annual Report, NALCO, FY23
Vision Document on Aluminium Metal for India 1388. Policies and Regulations
Vision Document on Aluminium Metal for India 1398 Policies and Regulations
8.1 Existing Policies: World vs India
In this chapter we have compared the policies and regulations of key Aluminium consuming/producing
countries which can provide valuable insights for increasing Aluminium consumption in India sustainably.
Understanding how other countries have boosted their Aluminium industries can help India create policies
that stimulate economic growth, attract investments, and create jobs. By aligning with international standards
and practices, India can enhance its competitiveness in the global market, making its Aluminium products
more attractive to international buyers.
8.1.1 China
China is the world’s leading Aluminium producer, generating around 41 MT each year, which represents
58.8% of the global annual output. Over the years, Chinese Aluminium Industry has been greatly supported
by policies in various end-use segments. In transport, policies like the Auto Industrial Policy (2000), Light
Duty Fuel Consumption standards (2004), scrappage programs (2008, 2011), and the NEV (New Energy
Vehicle or Zero Emission Vehicle) mandate (2018) were aimed at optimizing fuel consumption, reduce
emissions and in turn promoted Aluminium use in vehicles. Consumer durables saw increased Aluminium
demand due to subsidy programs (2009-2012) for energy-saving products. Packaging benefited from laws
like the Prevention and Control of Environmental Pollution by Solid Waste (2007) and the Food Safety Law
(2009), which encouraged recyclable and non-toxic materials. The electrical sector’s Aluminium demand was
boosted by the Wind Power Development Plan (2014) and standards for low-voltage Aluminium alloy cables
(2015). In construction, initiatives like the affordable urban housing focus (2011), the Belt and Road Initiative
(2013), the National Plan on New Urbanization (2014) and the Code for Acceptance of Energy Efficient
Building Construction (2015) has encouraged the use of green building material like Aluminium which has
significantly driven Aluminium consumption.
In addition to the classification of Aluminium as one of the strategic minerals and policies stated above, the
country has, in recent years, implemented various initiatives to support the sustainable growth of its
Aluminium industry and decarbonize the sector. Some of the measures taken by China has been mentioned
below:
Capacity Swap Scheme162: Since 2017, China has capped Aluminium production capacity at 45 MTPA with
an aim to control overcapacity and decarbonize its energy-intensive sectors. This policy requires the
retirement of old capacities for any new Aluminium smelter project to proceed, ensuring capacity addition by
an equivalent amount. Consequently, less efficient old smelters have been closed, reducing overall emissions
and energy consumption, thereby increasing the efficiency of Aluminium plants. As a result of this policy,
Chinese companies have begun establishing Aluminium production capacities in hydropower-rich areas
within China from Coal-reliant regions and outside of China, in resource-rich countries like Indonesia (known
for its Bauxite reserves) and regions with low energy costs such as Saudi Arabia, to ensure the sustainable
growth of their Aluminium industry.
The swaps are not expected to significantly impact Aluminium production levels in the near term, as most of
the planned capacity quotas were from plants already idle due to high operating costs. However, in the long
term, utilization rates are anticipated to increase and production costs to decrease as more efficient, low-cost
replacement capacities come online.163
China’s National Development and Reform Commission (NDRC)164: Like many other countries, the
Chinese government is implementing policies to encourage industrial decarbonization. They are increasing
the cost of carbon-intensive Coal power and promoting the use of more affordable, low-carbon grid power.
162 China's green policies push aluminum smelters to step up overseas investment, Avery Chen (S& Global), 09-May-2023, last
accessed on 04-Oct-2024
163 China Aluminium Market to Reach Capacity Ceiling on Swap Policy, Fitch Ratings, 20-Aug-2019, last accessed on 04-Oct-2024
164 China’s 2024-25 Energy Conservation and CO2 Reduction Plan – Compliance Considerations for Businesses, Arendse Huld (China
Briefing), 17-Jun-2024, last accessed on 04-Oct-2024
Vision Document on Aluminium Metal for India 140Additionally, the government is encouraging Aluminium plants to relocate to the southwestern region, where
there is an abundance of hydropower resources and a significant energy cost advantage.165 With an aim to
decarbonize its Aluminium sector and promote green power Aluminium, NDRC proposed a plan for the
Aluminium industry with following criteria by the end of 2025:
➢ 30% of the production capacity of China’s Aluminium industry should be above government’s ‘energy
efficiency benchmark’ (EEB)
➢ The proportion of renewable energy used in production should be more than 25%
➢ Output of recycled Aluminium should reach 11.5 MT.
Imported Scrap Quality Control Measures166: Since 2020, the Chinese government has implemented
quality standards for specific categories of scrap metal imports.
➢ Copper, brass, and Aluminium scrap are required to meet a minimum purity level of 99.1%.
➢ Additionally, upon arrival at Chinese ports, these materials must undergo and pass inspections
conducted by Chinese customs authorities.
➢ Furthermore, waste materials destined for import into China must be accompanied by a pre-shipment
inspection certificate, which should be issued by inspectors recommended by The China Certification
& Inspection Group.
Other Measures: In addition to the measures stated above, China has since long, been providing several
commercial benefits to its Aluminium producers:
➢ Export taxes on upstream Aluminium products, such as scrap, primary, and secondary Aluminium, have
been designed to discourage the export of these non-downstream products and to promote the
domestic downstream industry. While the export of primary Aluminium was discouraged by imposing a
15% export tax, the export of semi-fabricated and fabricated Aluminium products was favoured with a
VAT rebate of 13%-15%167.
➢ Low-cost financing, reduced land use fees, cheaper electricity, and tax benefits have been helping
Aluminium producers lower their production costs, making them more cost competitive in the global
market.
8.1.2 USA
USA is among the top 10 consumers of Aluminium by volume. Recognizing its importance to economic
growth, the USA has classified Aluminium as a ‘Critical Mineral’ on the USGS list of 50 identified minerals168.
Over the past decade, the Aluminium industry has invested more than USD10 billion in US manufacturing to
meet the growing demand for the metal169. Also, US policies focused on EVs, new emission norms for vehicles
and discouraging plastic use has greatly helped the growth of Aluminium demand. To support its domestic
Aluminium industry, USA has taken several measures which have been stated below:
Section 45X Production tax credit170: Section 45X of the ‘Inflation Reduction Act, 2022’ offers a 10% credit
on eligible production costs, including labor, electricity, depreciation, and overhead. The primary goal of this
tax credit is to support the domestic Aluminium industry, reducing reliance on imports and enhancing the
competitiveness of the US Aluminium sector. Additionally, the tax credit is encouraging many Aluminium
companies to restart idled production capacities and helping existing smelters become more energy-efficient
and less polluting, thereby boosting global competitiveness.171
165 How China is decarbonizing the electricity supply for Aluminium, Jorgen Sandstrom (World Economic Forum), 21-Apr-2022, last
accessed on 04-Oct-2024
166 How to export recyclable materials to China? Reyes Lopez (Scrap ad), 03-Aug-2022, last accessed on 04-Oct-2024
167 What Caused the Aluminum Industry’s Crisis?, Thomas Bradtke, (BCG), 24-Jun-2023, last accessed on 04-Oct-2024
168 What Are Critical Materials and Critical Minerals?, Department of Energy, last accessed on 04-Oct-2024
169 U.S. Aluminum Drives Modern Manufacturing with $10+ Billion Invested, The Aluminium Association, last accessed on 04-Oct-2024
170 Federal Tax Credits for Solar Manufacturers, Department of Energy, last accessed on 04-Oct-2024
171 US Aluminium industry welcomes clarification on Section 45X, Yasemin Esmen (Fast Markets), 20-Dec-2023, last accessed on 04-
Oct-2024
Vision Document on Aluminium Metal for India 141The act allocates over USD 50 billion for new grants, loans, and tax credits to support clean manufacturing
and promote solar, wind, and battery production, allowing these sectors to benefit from tax credits for five
years. It aims to incentivize the production and sale of domestically produced clean energy components, such
as PV modules and their subcomponents, inverters, tracking system components, and batteries. This initiative
is expected to generate new demand for Aluminium172.
Antidumping Duties (AD) and Countervailing Duties (CVD)173: In October 2023, to protect U.S. Aluminium
businesses from unfair competition, resulting from unfair pricing by foreign companies and unfair subsidies
to foreign companies by their governments, the U.S. Department of Commerce announced the initiation of
these duties for Aluminium extrusions from countries such as China, Colombia, Ecuador, India, and
Indonesia. The AD rates for Chinese Aluminium extrusions range from 32.79% to 86.01%, while the CVD
rates span from 7.37% to 216.61%. A similar antidumping duty was imposed in 2018 for certain Aluminium
foil imported from China which were used in F&B and pharma packaging, fins in AC's and industrial
insulations. In 2019 US imposed antidumping duty on imports of Aluminium wires and cables from China.
Aluminium Import Monitoring and Analysis (AIM): The system, managed by the Department of
Commerce, gathers and disseminates early warning data on Aluminium product imports. Through the import
monitor, AIM offers an early indication of Aluminium imports by publishing near real-time aggregate data on
imports into the United States. This system enables users to monitor potential unfair trade practices and
analyze evolving import trends that affect their specific markets and help industry to better prepare for market
fluctuation and competitive pressures 174.
8.1.3 European Union (EU) Council
In June 2023, the EU Council designated Bauxite, Alumina, and Aluminium as strategically important raw and
critical materials. To strengthen the domestic Aluminium industry, the EU aims to ensure that by 2030, its
processing and recycling capacities will cover at least 50% and 20%, respectively, of its annual consumption
of these strategic raw materials175. Other steps taken by the EU include:
Temporary State Aid Framework, 2022176: To tackle the high electricity prices driven by economic,
regulatory, and geopolitical factors, the EU Council proposed grants of EUR 400,000 per undertaking.
Specifically for Aluminium production facilities, a maximum aid of EUR 50 million was allocated to cover up
to 70% of eligible energy costs and 80% of operating losses. This initiative has helped stabilize the Aluminium
market, preventing disruptions, ensuring a steady supply of Aluminium products in the EU, and limiting
production curtailments at Aluminium plants.
CBAM (Carbon Border Adjustment Mechanism)177: The EU’s Carbon Border Adjustment Mechanism
(CBAM) is the EU's tool to put a fair price on the carbon emitted during the production of carbon intensive
goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries. This also
includes Aluminium which would encourage the import of highly decarbonized Aluminium in the EU nations.
By ensuring that a price has been paid for the carbon emissions embedded in the production of certain goods
imported into the EU, the CBAM will ensure that the carbon price of imports matches the carbon price of
domestic production. This measure will not only ensure a level playing field for the domestic low carbon
producers but also help maintain the EU’s climate objectives without being compromised. This will also
encourage the existing idled Aluminium plants to operate with full capacities.
EU Innovation Fund178: To meet EU’s GHG emission reduction targets, the EU Innovation Fund allocates
EUR 40 billion to be invested by 2030 in advancing clean, low-carbon, and innovative technologies. A special
172 FACT SHEET: Clean Manufacturing Investments in the Inflation Reduction Act, Bluegreen Alliance, Jun-2022, last accessed on 04-
Oct-2024
173 Inflation Reduction Act creates new tax break for US critical minerals, Camellia Moors (S&P Global), 15-Aug-2022, last accessed on
04-Oct-2024
174 https://www.trade.gov/Aluminium-monitors
175 European Council adds bauxite, alumina, aluminum to strategic materials, S&P Global, last accessed on 6th Oct 2024
176 Reconciling growth and decarbonisation amidst the energy crisis, European Aluminium Reaction to the Repower EU Plan, May-
2022, last accessed on 04-Oct-2024
177 Carbon Border Adjustment Mechanism, europa.eu, last accessed on 04-Oct-2024
178 Discover the Innovation Fund, one of the world's largest funding programmes, with €40 Billion funding, euinnovationfund.eu, last
accessed on 04-Oct-2024
Vision Document on Aluminium Metal for India 142allocation of EUR 1.4 billion is designated to enhance industrial manufacturing capacity, including the
Aluminium sector. This will help generate new domestic demand for Aluminium and ensure sustainable
growth of the domestic Aluminium industry.
In addition to the policies stated above, Europe’s packaging recycling targets (2017) which aim for 65% by
2025 and 70% by 2030 and European Strategy for Plastics in a Circular Economy (2018) promote recyclable
Aluminium packaging. The 2019 initiative to phase out internal-combustion engines by 2040 in several
countries increases Aluminium demand in the transport sector. Additionally, policies reducing the total
ownership cost of EVs, such as subsidies and tax exemptions in Norway, the Netherlands, the UK, and
France, further drive Aluminium demand in the automotive industry.
8.1.4 Russia
Russia is third largest primary Aluminium producer in the world with a contribution of ~5% to the world’s
Aluminium production179. With a strong emphasis on efficiency and technological innovations in the sector,
Russia has also identified Aluminium as ‘strategic metal’ for defence. Here are some policies of Russia which
are key enablers for growth of domestic Aluminium industry:
“Aluminium Valley” Special Economic Zones (SEZ)180: The establishment of the “Aluminium Valley” SEZ
in Siberia is a strategic initiative by the Russian government to boost Aluminium production and consumption.
Companies operating within these zones are guaranteed protection from unfavorable changes in taxes and
duties for up to 49 years. This long-term stability is crucial for attracting and retaining investment. Investors
in the SEZs receive a series of tax benefits, customs preferences and infrastructure support. These incentives
reduce the overall cost of production, making the zones more attractive to both domestic and international
investors.
Export Tariff on scrap, primary and secondary Aluminium: To discourage exports of upstream products,
Russia has placed tariffs on exports of such products. On the other hand, to promote value addition within
the country, in 2021, Russian Government set the export duty on Aluminium alloys at 0%181.
Government Support for Aviation Industry: In the aviation sector, the formation of the Unified Aircraft-
Building Corporation (UABC) in 2006 consolidated aircraft manufacturing activities, enhancing efficiency and
production. The Aviation Industry Development Plan 2013-2025, coordinated by multiple ministries, aimed to
boost global competitiveness and production volumes. Additionally, significant government support
announced in 2014, with plans to invest $28 billion by 2025, further strengthened the aviation industry, driving
Aluminium demand in this sector.
8.1.5 Middle East
Middle Eastern countries benefit from some of the lowest electricity and natural gas costs globally and are
significant Aluminium producers outside of China. The UAE and Bahrain are the leading Aluminium producers
in the region, collectively contributing nearly 6% of the world’s primary Aluminium production. Key initiatives
promoting the growth of the Aluminium industry in the Middle East include:
Dubai Industrial Strategy 2030182: The strategy aims to transform Dubai into “an international hub for
knowledge-based, innovative, and sustainable industrial activities.” This will be achieved by enhancing
industrial coherence and integration with other key economic sectors, particularly strategic ones, and by
creating an attractive investment environment through various initiatives and incentives.
Six industrial subsectors have been targeted in this strategy, with Aluminium & Fabricated Metals being one
of them. Dubai is a leading global producer of fabricated metals, particularly Aluminium. While this leading
position is currently based on the manufacturing of upstream primary products, the strategy aims to enhance
the Emirate’s competitiveness and expand its production base to include downstream finished products. The
179 Mineral Commodity Series 2023, USGS, last accessed on 04-Oct-2024
180 https://www.aluminas.ru, last accessed on 10-Aug-2024
181 Government approves zero duties on Aluminium alloys, 28-Oct-2021, Government Decisions - The Russian Government, last
accessed on 10-Aug-2024
182 Dubai Industrial Strategy 2030
Vision Document on Aluminium Metal for India 143growth of other five sectors targeted in this strategy will also contribute to significantly to the domestic
Aluminium demand.
Free Trade Zones183: These FTZs provide a plethora of incentives for the investors to set up the upstream
and downstream value chain in Dubai. Businesses established in these zones benefit from 100% foreign
ownership, providing full control to investors. One of the key attractions is the exemption from corporate and
personal tax for an extended period, typically up to 50 years. This tax holiday serves as a powerful incentive
for foreign companies looking to establish a presence in Dubai.
Invest Aluminium Bahrain Program184: This program, initiated by Bahrain’s Ministry of Finance and the
Ministry of Industry and Commerce, aims to develop the country’s downstream Aluminium industry. It focuses
on creating more job opportunities for Bahrainis, boosting export earnings, and achieving greater value
addition. The project plans to provide the necessary infrastructure to establish a downstream zone near the
Aluminium Bahrain factory, attracting both local and foreign investment and enhancing exports in this dynamic
sector.
8.1.6 Indonesia185
Indonesia’s Bauxite reserves stand at 1 BnT and is also the sixth largest producer of Bauxite. A key
component of Indonesia’s 20-year development plan, the “2045 Golden Indonesia Vision,” is to elevate the
country to the world’s fifth-largest economy. A crucial aspect of achieving this goal is the development of an
integrated metals supply chain, with a focus on downstream processing of key commodities such as Bauxite,
nickel, and copper. Indonesia has taken several measures to promote the domestic Aluminium industry:
“Pioneer” Industry Status for Aluminium186: In line with the 2045 vision, Indonesia has granted “Pioneer”
industry status to Aluminium subject to fulfilment of criteria like substantial investment, creating significant
employment using raw materials and contributing to export. This status offers several commercial benefits to
encourage investment and development of the domestic Aluminium industry. Some of the benefits include
tax holiday of 100% of the corporate income tax due for 5 to 20 years, for project value more than IDR 500
Bn depending on the scale of investment and 50% reduction in tax due for 5 years for project value ranging
between IDR 100 to 500 Bn.
Ban on Bauxite Export: To further develop its downstream domestic metals sector, Indonesia announced a
ban on Bauxite exports in 2021, which was confirmed in May 2022 and officially took effect on June 10, 2023.
This ban is expected to remain in place for the foreseeable future. Previously, Indonesian Bauxite accounted
for a significant portion of China’s imports. However, with the ban in place, China is now exploring
opportunities to establish Aluminium production capacities within Indonesia.
Restrictions on Scrap Imports187: In 2019, the Indonesia announced it would restrict waste imports to those
with a threshold of 0.5% impurities. However, in July 2021 it eased its restrictions and now permits import of
pre-export inspected recycled commodities with up to 2% impurities.
8.1.7 Malaysia188
Malaysia is a significant player in the global Aluminium market and accounted for nearly 2.5% of the global
Aluminium trade in 2023 (by value). To achieve its Low Carbon Aspiration 2040 initiative, Malaysian
government launched the National Energy Policy 2022-2040 to develop a low-carbon economy with focus on
EV penetration, increased capacity and usage of renewable energy sources, alternative low carbon fuels for
transportation etc.189. These measures are expected to boost the Aluminium demand in Malaysia.
183 Free trade zones and public-private cooperation to boost Dubai industry, UAE: Dubai | Industry, Oxford Business Group, last
accessed on 04-Oct-2024
184 Aluminium Downstream Zone – Invest in Bahrain, last accessed on 04-Oct-2024
185 Indonesia vows to invest more in Aluminium supply chain in strategy for critical metals, Laura Roberts (Fast Markets), 20-Jun-2024,
last accessed on 04-Oct-2024
186 Investing in Indonesia – 2023: Industrial Incentives & Zones, OOSGA, 31-Oct-2023, last accessed on 04-Oct-2024
187 Indonesia to allow waste imports with 2% contamination limit, Corin Williams (MRW), 19-Jul-2021, last accessed on 04-Oct-2024
188 Guidelines for Importation and Inspection of Metal Scrap, sirim-qas.com.my, last accessed on 04-Oct-2024
189 Malaysia: Malaysian National Energy Policy 2022-2040, Baker Mckenzie, 26-Sept-2022, last accessed on 04-Oct-2024
Vision Document on Aluminium Metal for India 144Aluminium Scrap Import Regulation: To prevent import of low-quality Aluminium scrap, The Malaysian
Ministry of International Trade and Industry (MITI) released guidelines for the Importation of Metal Scrap that
became effective since 2022. The guideline states criteria for waste and scrap of ferrous, copper and
Aluminium to be allowable to import. The key points are-
• It is to be ensured that the imported metal scrap is not contaminated with any scheduled waste, hazardous
materials, or other impurities
• For Aluminium waste or scrap (HS Code 7602) following criteria should be met-
Criteria Grouping Requirement (% by weight)
Solid Non-Ferrous Minimum: 94.75%
Solid Ferrous Maximum: 5.0%
Solid Plastics Maximum: 0.25%
Scheduled waste including electrical and electronic 0%
Other Impurities 0%
• Pre-shipment inspection by accredited inspection body for each consignment to ensure that metal scrap
conforms to the criteria set.
8.2 India – Need to Emulate the Global Growth Blueprint
India is currently among the top three producers and consumers of Aluminium globally. However, its per
capita consumption lags significantly behind the world average of 12 kg. Factors such as taxes and duties on
Coal and electricity and an inverted duty structure on raw materials pose challenges to the growth of the
domestic Aluminium sector. Additionally, India lacks a direct policy supporting the Aluminium industry.
Nevertheless, various government initiatives, such as the PLI scheme for large-scale electronics
manufacturing, white goods production, high-efficiency solar PV modules, automobiles and auto components,
the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme, and
the Green Energy Corridor Initiative, have created a favorable environment for domestic manufacturing.
These policies promote the adoption of products that use Aluminium as a key component, thereby driving
demand for Aluminium.
To sustain and exponentially expand its Aluminium demand while remaining competitive with leading
Aluminium producing countries, India can take cue from the major Aluminium producers/consumers.
Globally, major economies have recognized Aluminium as a strategic metal, classifying it as a core or pillar
industry and a strategic sector in their long-term industrial growth strategies.
Countries such as China, those in the Middle East, Russia, Canada, Norway, and Iceland offer various
incentives to support their domestic Aluminium industries. These incentives include concessions and
subsidies, availability of raw materials, cheaper power through long-term agreements, preferential gas
allocation, tax benefits, export tax incentives, and low-interest rate loans.
Additionally, countries like the USA, China, the EU, Australia, and Turkey have implemented several
safeguard measures, such as high customs duties and stringent standards, to mitigate the threat of imports
and protect their domestic industries.
By formulating policies and reforms tailored to the Indian Aluminium industry India can ensure cost
competitiveness in terms of raw material security for critical inputs, Coal, power, and logistics. This support
will boost the domestic Aluminium industry and help them stay competitive globally and help India achieve
self-sufficiency by reducing import dependency, thereby creating a level playing field and attracting more
investments.
Vision Document on Aluminium Metal for India 1459. Aluminium Sector Vision
Vision Document on Aluminium Metal for India 1469 Aluminium Sector Vision
India's vision for the Aluminium sector should align with the goals of ‘Atmanirbhar Bharat’ and ‘Viksit Bharat’.
Launched in 2020 by Prime Minister Narendra Modi, ‘Atmanirbhar Bharat’ aims to make India self-sufficient
by developing domestic production capabilities, crucial for the Aluminium industry.
The Indian Aluminium sector can play a crucial role in achieving the ambitious goals190 of the Viksit Bharat
2047 vision-
• Economic Growth
The Aluminium industry contributes 2% of India’s manufacturing sector GDP, which is expected to grow
substantially191. The Aluminium sector can significantly contribute to achieving a USD 30 trillion economy
by 2047 by enhancing domestic production and focusing on high-quality Aluminium products to boost
exports.
• Boosting Indigenous Industry and Innovation
Aluminium is essential for various industries, including automotive, electrical, aerospace, and
construction. By investing in R&D and innovation, the sector can enhance the quality and competitiveness
of Indian products.
• Self-Reliance in Defence and Space
Aluminium’s lightweight and durable properties make it ideal for defence and space applications.
Developing indigenous capabilities in these sectors can reduce dependency on imports and strengthen
national security.
• Green Growth and Climate Action
Aluminium is infinitely recyclable, which supports sustainable practices. Increasing the use of recycled
Aluminium can reduce carbon emissions and energy consumption. Additionally, Aluminium is crucial for
renewable energy technologies like solar panels. The role of Aluminium in light-weighting in the
transportation sector can also play a significant role in bringing down India’s oil-import bill.
• Empowering Youth with Skills and Education
The Aluminium industry is a significant source of employment. It directly and indirectly generates
employment of 20,500 for per Million Tonne of Aluminium Production192. It includes jobs in the upstream
sector i.e. Bauxite mining, Alumina refinery and Aluminium production. For every direct employment,
Aluminium industry has the capacity to generate indirect employment of 3.7 times. The Aluminium sector
can collaborate with educational institutions to provide specialized training and skill development
programs. This can prepare the workforce for advanced manufacturing and technological roles.
The Aluminium sector should focus on enhancing domestic production, reducing import dependency, and
fostering innovation. By investing in advanced technologies and sustainable practices, India can boost the
competitiveness of its Aluminium industry. This includes developing high-quality products for critical sectors
like aerospace, defense, and infrastructure, enhancing recycling, and reducing carbon emissions.
Strengthening the Aluminium sector will support economic growth, create job opportunities, and contribute to
a resilient and self-sufficient economy. India’s vision should be to develop a self-reliant Aluminium industry
that stands as a competitive and sustainable global leader. To achieve this, India’s mission should be to
promote the Aluminium industry for a sustainable future through eco-friendly and sustainable practices.
190 Vision India@2047: Transforming the Nation's future, LAARDIS, December 2023
191 Need for an Aluminium Policy in India, NITI AAYOG, 2017
192 Employment in the Global Aluminium Industry, 2019, International Aluminium Institute; May 2021
Vision Document on Aluminium Metal for India 1479.1 Overall Strategic Objectives
9.1.1 Strengthening Domestic Aluminium Industry to Become ‘Atmanirbhar’
It is crucial to meet 100% of domestic demand for primary and downstream Aluminium products through
domestic production to become ‘Atmanirbhar’. As of FY24, India’s domestic primary Aluminium production
capacity stands at 4.2 MTPA, with imports accounting for 55% of total domestic Aluminium consumption. To
minimise this dependency on imports and capture a reasonable share of global trade, the metal Aluminium
production capacity must be expanded to 12 MTPA by FY30, 25 MTPA by FY40, and 37 MTPA by FY47.
Increasing the per capita consumption of Aluminium in India is another vital goal. Currently, the per capita
consumption is 3.5 Kg (FY24), which is significantly lower than the global average of 12 kg. By 2047, India
aims to surpass this global average. This can be achieved by enhancing the application and product
innovation of Aluminium. It has been reported that the number of Aluminium applications in India is only a
tenth of the global average. As the number of applications increases, so will the consumption of Aluminium.
Amongst the top 10 manufacturers globally, all predominantly primary aluminium producers, China boasts 5
companies. Overall, China has close to 60 smelters. USA also has several companies, such as Arconic,
Alcoa, Century, and Kaiser, each with a turnover exceeding USD 1 billion, though these include both primary
and secondary producers. USA had about 15 primary Aluminium smelters most of which are closed or have
their potlines curtailed today. Europe also has close to 20 primary Aluminium smelters. Russia has close to
10 smelters. Clearly, India has scope for higher number of alumina refineries and smelters.193
In summary, the Indian Aluminium industry must focus on expanding its production capacity and increasing
per capita consumption through innovation and application. Achieving these targets will not only make India
self-sufficient in Aluminium production but also position it as a major player in the global Aluminium market.
9.1.2 Self-Sufficiency in Raw Material for Aluminium Production
Bauxite: India’s Bauxite production reached 24 MT in FY24. The increasing demand for Aluminium has led
to a significant rise in Bauxite imports, which have more than doubled from 1.6 MT in 2014 to 3.8 MT in 2023.
Alumina: In the fiscal year FY24, India’s Alumina production was 7.6 MT, with imports and exports amounting
to 2.5 MT and 2.1 MT, respectively in 2023. Despite not being self-sufficient in Alumina production, a
considerable quantity is exported. However, the capacities of NALCO and Vedanta are being increased and
the Alumina imports will reduce significantly.
Scrap: India is currently dependent on imported scrap for meeting 85%-90% of the domestic scrap
requirement.
To address the growing demand for Aluminium and ensure adequate Alumina supply, India should aim to
meet 100% of its Bauxite and Alumina requirements from domestic sources by 2035. India will also need to
participate in the global supply chain for scrap to ensure consistent availability of raw material for secondary
route. This will also contribute significantly to India’s ambition to reduce carbon footprint. This strategic move
will not only reduce dependency on imports but also strengthen the country’s position in the global Aluminium
market.
9.1.3 Achieving Carbon Neutrality in Aluminium Production
The Indian Aluminium industry is responsible for over 3% of the country’s total greenhouse gas emissions.
While primary Aluminium producers have set a target to reach net-zero emissions by 2050, the sector, as a
whole should aim to reduce Greenhouse Gas emissions from Aluminium production by 30% by 2030
compared to 2023 baseline to achieve net-zero. For this India will need to plan low carbon intensity green
line dependent on RTC RE and scrap.
193 Primary Aluminum Producers, Light Metal Age Magazine, 24 November 2023, last accessed on 03 October 2024
Vision Document on Aluminium Metal for India 1489.1.4 Focus on Value Addition and Export growth
Notably, 76% of India’s Aluminium exports volume consist of primary Aluminium, with only 24% being
downstream products. Conversely, China’s export composition is 5% primary Aluminium and 95%
downstream products. In terms of value, India exported Aluminium and Aluminium products worth USD 7.3
billion in 2023. Of this, USD 4.8 billion (65%) was unwrought or primary Aluminium, while 35% were
downstream Aluminium products. In contrast, China exported Aluminium and Aluminium products worth USD
35 billion, with only 3% being primary Aluminium and 97% being downstream Aluminium products. This
highlights China’s strategic focus on capturing a high share of the value-added in the supply chain before
exporting. To enhance its position in the global Aluminium market, India should adopt a strategic approach
focusing on increasing the production and export of value-added downstream Aluminium products. India
should aim to maximize the conversion of its primary Aluminium production into value-added products by
2035 and should maximize its export composition towards downstream Aluminium products by 2047.
In 2023, China accounted for a significant 12.6% of the global Aluminium export market, with a total export
volume of 67.6 million tonnes for the year. In comparison, India’s export share was 3.8% of the global
Aluminium trade volume. Aluminium exports from India represented 1.7% of the country's total export value,
with cumulative merchandise exports reaching USD 431 billion in 2023194. India aims to achieve USD 1 trillion
in merchandise exports by 2030.
To increase its share in the global Aluminium market volume from 3.8% in 2023 to 10% by 2047, India needs
to boost its Aluminium metal export volume to 3.8 MT by FY30, 6.9 MT by FY40, and 9.1 MT by FY47.
9.2 Functional Objectives
9.2.1 Renewable Energy Usage
In accordance with the Renewable Purchase Obligation (RPO) Trajectory set forth by the Ministry of Power,
it is mandated that by 2030, 43.33% of the total energy consumed by Aluminium smelters must be sourced
from renewable energy. To align with this directive and further our commitment to sustainable practices, we
should set ambitious targets for the integration of renewable energy in our Aluminium production processes.
Given that Aluminium production necessitates a substantial and reliable electricity supply, it is improbable
that renewable energy alone can fulfill the entire demand. Therefore, it is anticipated that 30% of the electricity
requirement will continue to be met by captive power plants (CPP)195. India should target to increase the
share of renewable energy to 70% of the total energy used in Aluminium production by 2070.
9.2.2 Increasing Aluminium Recycling Rate
India’s vision for an Atmanirbhar Bharat (self-reliant India) highlights the need for a robust domestic
Aluminium industry that leverages both primary and secondary Aluminium production. Currently, India’s End-
of-Life Recycling Rate (EOL-RR) for Aluminium stands at approximately 30%, compared to the global average
of around 56%. This indicates significant potential for improvement in scrap collection and metal recovery. To
align with global standards, India should aim to achieve the current global EOL-RR for Aluminium by 2047.
9.2.3 R&D Investment
In developed countries, Aluminium has over 3,000 applications, whereas the no. of applications is close to
300 in India196. To bridge the gap between no. of applications in developed countries and India, Indian Govt.
should focus on R&D in Aluminium focusing on downstream sector.
194 India | Imports and Exports | World | Aluminium and articles thereof | Value (US$) and Value Growth, YoY (%) | 2012 - 2023
(trendeconomy.com), last accessed on 03-Oct-2024
195 Evaluating Net-zero for the Indian Aluminium Industry, CEEW, April 2024
196 Need for an Aluminium Policy in India, NITI AAYOG, 2017
Vision Document on Aluminium Metal for India 1499.2.4 Technology and Digital Interventions
As of 2023, no Aluminium plants globally have been recognized as Industry 4.0 Lighthouses by the World
Economic Forum (WEF). In contrast, two steel plants in India have achieved this certification, showcasing
their advanced adoption of Fourth Industrial Revolution technologies. A total of 15 manufacturing plants in
India have been certified as Lighthouses in 2023, highlighting the country’s progress in integrating cutting-
edge technologies to enhance productivity and efficiency. So, adoption of Industry 4.0 technologies such as
AI, IoT, smart manufacturing technologies to be leveraged to transform Indian Aluminium industry.
9.2.5 Quality Certification
100% of Aluminium products to meet international quality standards by 2030. 100% of Aluminium scrap
imported into India should be refined and certified as free of inimical elements before being cast into other
downstream products.
9.2.6 Skill development
Develop a skilled workforce by training in Aluminium production techniques and safety standards by 2030.
9.2.7 Product diversification
High-performance Aluminium alloys for various applications, such as automotive, aerospace, and
construction to be developed in India.
9.3 Key enablers
9.3.1 Key Enablers to Strengthen India’s Aluminium Industry and Achieving Self-
Sufficiency in Raw Material Production
9.3.1.1 Classifying Aluminium as ‘Core’ Industry197
India's core sector encompasses eight crucial industries: Coal, crude oil, natural gas, refinery products,
fertilizers, steel, cement, and electricity. However, unlike Steel, the Aluminium Industry in India has not been
accorded ‘Core’ status, despite being a vital component of the nation's economy. Aluminium is indeed of
strategic importance for several reasons, particularly in driving the government’s agenda in various new-
generation and sunrise industries like Electrical Vehicles, Wind Turbines, Solar panels, Packaging etc. The
Aluminium sector accounts for almost 2% of India's manufacturing GDP, a figure that is anticipated to rise
alongside consumption growth. Moreover, the industry is a significant source of employment, directly and
indirectly generating approximately 800,000 jobs. Also, these statistics highlight the critical role of the
Aluminium industry in the broader manufacturing sector and its influence on India's economic landscape.
Consequently, it is advocated that the Aluminium Industry be designated as a "Core Industry”, and it has also
been recommended in a report published by NITI Aayog. It will help the industry to get preferential allocation
of energy, rakes, PLI, government procurement support, protection from dumping, FTAs etc.
9.3.1.2 Expediting exploration and auction of Bauxite blocks198
Aluminium, due to its role in electric vehicles and aerospace industry, is of strategic importance to the world
and India as it faces an uncertain energy transition and geopolitical scenario. As discussed earlier in the
document, the expansion of Aluminium sector of any country cannot be driven through the secondary route
as it is limited by the ability of the economy to generate scrap. Secondary route may be less energy-intensive,
but it can only maintain status quo. Primary route can be the only basis for expansion of the industry. The
inability to see this link led to the downfall of the US Aluminium industry. ALCAN, now part of Rio Tinto but
originally an offshoot of ALCOA, is today the largest exporter of Aluminium to USA in an ironical turn of events.
Primary Aluminium needs energy and access to bauxite. Of all the leading Aluminium producing countries in
197 Need for an Aluminium policy in India, NITI AAYOG, 2017
198 Why import bauxite when you can mine, Financial Express, March 18, 2021, last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 150the world only India and Russia have these necessary ingredients. It would be unfortunate, if India despite
possessing these resources, is unable to capitalize on the same.
Despite having the resources and a robust market, India's efforts to auction limited number of Bauxite mines
is impeding its potential to emerge as a global manufacturing leader. Notably, even with India's vast Bauxite
resources, which are among the world's largest at nearly 4.9 BnT, the nation still imports Bauxite for its
Aluminium needs. The inability to utilize these resources has led to a substantial foreign exchange loss,
estimated at over USD 1.1 Bn199 in the past five years. This financial drain is likely to persist if India doesn't
manage to auction Bauxite mines successfully and boost existing mine production by at least 50%.
Getting bauxite linkage has proved to be difficult for Indian alumina refineries. The Lanjigarh investment of
Vedanta struggled for many years and even today awaits finalization of bauxite pricing methodology. The
best quality bauxite in the Eastern Ghats is claimed by local tribals on account of their hereditary rights of
worship. On the other hand, only 13% of India’s bauxite resources are classified in reserve category. Even
the blocks auctioned so far, were won at very highly premiums, reducing the profitability of the aluminium
producers. The following actions are needed –
Expediting exploration of Bauxite blocks200
Considering the quality of Indian Bauxite, 3 tonnes of Bauxite is required to producing 1 ton of Alumina and
2 tonnes of Alumina is required for producing 1 ton of metal Aluminium. Therefore, for 1 ton of metal
Aluminium there is requirement of 6 tonnes of Bauxite. It indicates that for development of Aluminium sector
in India, there is huge requirement of Bauxite as well as refining facilities of Bauxite for preparing Alumina.
India has huge potential of Bauxite, however, most of the resources are yet to be explored to convert the
‘indicated’ resources as ‘proved or probable’ category.
Central Govt. through MMDR Act, 2015 has created National Mineral Exploration Trust to create fund for
exploration activities and the National Mineral Policy now facilitates for FDI investment in mineral exploration.
Govt. needs to take active role in attracting private sector in exploration. Also, deposits beyond the Eastern
Ghats should be unlocked through expeditious proving of resources and auction of Composite License. This
initiative should be taken up on a mission mode by a designated taskforce.
GSI should be given targets to expedite bauxite exploration, specially in Andhra Pradesh, Chhattisgarh and
Odisha.
Auctioning larger bauxite blocks
The proving of large sized leases (having more than 100 MT resources) should be prioritized over smaller
leases. The lack of clarity on potential pipeline of large deposits makes it difficult for large players to plan
alumina refining capacities. Where leases are smaller in size, a cluster of those within a reasonable radius,
amounting to over 70 – 80 MT resource, may be offered as a single license at one go, for the purpose of
auction so that an alumina refinery may be planned against the same. Such leases may be identified in
Chhattisgarh, Jharkhand and Odisha. This initiative should be taken up on a mission mode by a designated
taskforce. State Governments should exercise the power vested in them vide Section 6 (1) (c) of MMDR Act
for auctioning of non-contiguous mining leases. Visibility of a sufficient pipeline of leases can also instil
confidence in bidders and prevent them from unreasonable bidding aggression.
Govt. of Odisha has already identified ~40-45 nos. of bauxite blocks in Koraput, Rayagada, Kalahandi,
Kandhamal districts some of which are already explored or under exploration. Resource quantity in many of
these blocks are less than 5 MT. State Govt. may consider amalgamation of the smaller size blocks, wherever
possible, and put up for auction as bigger blocks to attract serious investors. Similar such small blocks may
be found and clubbed for auction purposes in other Bauxite rich states. Any changes in rules, if necessary,
need to be done.
199 ITC Trademap, last accessed on 12-Aug-2024
200 Development of Aluminium and Copper industries in the Country, 31st Report of the Standing Committee on Coal, Mines and Steel
(17th Lok Sabha), 22-Mar-2022
Vision Document on Aluminium Metal for India 151New players (other than NALCO, Vedanta, and Hindalco) are waiting in the wings. Odisha and AP
Government may consider award of land parcels for setting up green-field refinery along with attached mining
lease and create efficiency parameters even for the development of the alumina refinery on the lines of MDPA
for mining leases. This can be secured through higher performance bank guarantee.
A railway master plan is required for the bauxite mining areas to ensure that railway lines are laid and the
movement of bauxite rakes and BTAP rakes are facilitated.
9.3.1.3 Early operationalization of Coal and Bauxite blocks201
The production of Aluminium is a complex and energy-intensive process, with several major cost components.
Alumina, other raw materials, and the energy cost account for up to 88% of total cost of production. While
Alumina alone accounts for ~33% of total cost of production mainly due to significant energy consumption
and cost of caustic soda, energy costs for the electrolysis process can account for ~37% of the total production
costs. While bauxite is required for Alumina production, coal is consumed in the thermal CPPs.
To ensure cost competitiveness, timely operationalization of captive Coal blocks is necessary. Out of 107
Coal blocks auctioned till date, only 11 Coal blocks have been operationalized successfully.202 Land
acquisition and obtaining statutory clearances like Environmental Clearance (EC), Forest Clearance (FC) are
major bottlenecks for mine operationalization.
It is crucial that industries, upon being granted Coal and Bauxite mining rights, encounter no administrative
or legal obstacles while bringing these mines into operation. In this regard the following support measures
are advocated:
• The government may ensure that the major statutory clearances (Environment, Forests, and
miscellaneous) should be available with the blocks put up for auction.
• Alternatively, Environmental Clearance (EC) and Forest Clearance (FC) may be granted in one single
step within a specified timeline. Also, the industries may be allowed to self-certify compliances, with the
condition of imposing substantial penalties by the Govt. for any breaches.
9.3.1.4 Regulating tariffs and revisiting FTAs
It is required to implement a balanced approach to tariff regulations keeping in mind the importance to protect
the domestic Aluminium industry form overpricing of primary Aluminium due to import parity price &
unrestricted import of downstream products and at the same time ensuring the competitiveness of the
downstream industry. Therefore, a two-pronged strategy could be considered:
Revisit FTAs
In the India-ASEAN FTA, India placed all items in the Normal Track except for 760110 (Unwrought Aluminium,
unalloyed). However, Malaysia's high MFN duties (25%-30%) on tariff lines 7604 to 7608 severely restrict
India's downstream industry, especially MSMEs, from exporting their products. Similarly, Indonesia's
placement of downstream Aluminium products under the Sensitive Track hinders Indian exporters' access to
the Indonesian market. These tariff lines should be reviewed to include the downstream products under
‘Normal Track’ to allow Indian downstream industry to access these markets.
Indonesia and Malaysia are significantly expanding their primary Aluminium production capacities.
Indonesia’s capacity has grown from 261 kTPA in 2018 to 636 kTPA in 2023, with plans to reach 1.5 MTPA
by 2027. Malaysia’s capacity increased from 760 kTPA to 1.1 MTPA over the same period. This surge in
supply from these countries could present competitive challenges for Indian Aluminium producers. Hence, to
shield Indian producers from the competitive pressures posed by the increased supply of Aluminium from
Indonesia and Malaysia, relevant tariff items should be reviewed, and bilateral safeguard clauses should be
strengthened.
201 Industry sources
202 Coal Ministry to Launch 10th round of Commercial Coal Block Auction, PIB Delhi, 14th Jun 2024, last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 152Several strategic adjustments to the Rules of Origin (RoO) like implementing Product Specific Rules for
countries like Indonesia, Malaysia, and Thailand are required. Specifically, for primary Aluminium, the RoO
should require “Refining & Smelting at the country of Export,” ensuring that only primarily produced Aluminium
enters India. For downstream products, the RoO may be reviewed to prevent Aluminium value-added
products made from scrap from entering the Indian market while allowing genuine products from ASEAN
countries. The current FTA also has cumulative value addition criterion RoO norm which should be removed
to include minimum value addition required in one member nation to export at preferential tariff level. This
measure will prevent re-routing of Aluminium products.
Also, ensuring a level playing field for the domestic Aluminium industry is crucial during the FTA negotiations
with the Russia-led Eurasian Economic Union (EAEU) as industry has raised concern about the potential
influx of Aluminium articles from Russia.
Conditional FTAs for Technology Transfer
To strengthen the Indian Aluminium sector, India may consider negotiating conditional Free Trade
Agreements (FTAs) with technologically advanced countries like Canada, Russia that include provisions for
technology transfer. These agreements should specifically focus on facilitating the transfer of advanced
technologies related to refining and smelting. By incorporating clauses that mandate technology transfer,
India can gain access to cutting-edge processes and innovations, which can significantly enhance the
efficiency and competitiveness of its Aluminium industry.
Such FTAs can include provisions for technical cooperation, research and development partnerships, and
the sharing of best practices in Aluminium manufacturing. This will not only help Indian companies adopt
more efficient and sustainable production methods but also foster innovation and skill development within the
industry.
By leveraging these conditional FTAs, India can modernize its Aluminium sector, reduce production costs,
and improve the quality of its products, making them more competitive in the global market. This approach
will also support the broader goal of industrial growth and economic development in India. One classic
example can be the India-European Free Trade Association (EFTA) Trade, where similar provisions were
kept.
Trade remedial measures
Approximately 70% of downstream imports come from China, with Aluminium foil and plates making up about
65% of total downstream imports. Appropriate trade remedial measures should be taken on a case-by-case
basis where there is proof of dumping of Aluminium articles in Indian market.
The Indian Aluminium industry already pays taxes like coal cess, electricity duty, while the imported
Aluminium articles are often cheaper because other countries may not have similar taxes, giving their
products a price advantage. A taxes like Border Adjustment Tax (BAT) would level the playing field between
domestic producers and foreign competitors, ensuring that the environmental costs are accounted for in the
price of imported goods.
Vision Document on Aluminium Metal for India 153Protecting Domestic Industry from Unilateral Restrictions like CBAM under FTAs
The EU’s Carbon Border Adjustment Mechanism (CBAM) aims to prevent carbon leakage by imposing a
carbon price on imports from countries with less stringent climate policies. To protect the domestic Aluminium
industry from such unilateral restrictions, India should seek exemptions or special considerations for its
Aluminium industry to mitigate the impact of CBAM and similar mechanisms during FTA negotiations.
Focus on Research and Development
Research and Development (R&D) should be more focused on development of new high-performance alloys
for aerospace sector, expanding the applications of recycled Aluminium by management of impurities.
9.3.1.5 Technological upgradation
Alumina
Indian Bauxite contains 5 to 14% of boehmite (mono hydrated Alumina) and the rests are gibbsite (trihydrate
Alumina). In general, a low digestion temperature (~ 150° C) is employed for gibbsitic Bauxite while a high
temperature (~ 250° C) is used for boehmitic Bauxite. In India most of the refining plants are having facilities
of single stage digestion (for extracting gibbsite), excepting Muri and Renukoot Alumina plant of Hindalco. In
single stage digestion plant the boehmitic Bauxite is being wasted as a part of red mud. As a result, there is
a gap of 7 to 9% between TA% (Total Alumina content) and TAA% (Total Available Alumina content). Ideally
this gap should be reduced to 2 to 3% if the Bauxite will be refined under double digestion process. Therefore,
it is advisable to convert to / construction of Alumina plant with facilities of double digestion to produce more
Alumina and in turn more metal Aluminium. Some of the technological advancements in alumina refining and
red mud utilisation/treatment have been mentioned in Annexure 2.
Aluminium
India currently lacks advanced technology for Aluminium smelters, making it reliant on global technology
providers such as Rio Tinto Alcan and GAMI for setting up new plants and upgrading existing ones. This
dependency increases the cost of both upgrading and establishing new facilities. An overview of the smelter
technologies is provided in Annexure 2. To enable sustainable development of its domestic Aluminium
industry, India could leverage its relationships with countries that host the latest Aluminium smelting
technologies for economical technology imports.
9.3.1.6 Providing institutional support to the Aluminium Sector203
In both Aluminium and steel, India is ranked second in the world in terms of production. The difference is,
however, in the quantum of steel produced in MTPA and the number of players in the industry classified into
various categories. Also, steel sector predates Aluminium sector globally and in India. There is a whole
Ministry dedicated to steel due to its large economic value unlike Aluminium. While the Aluminium industry
has its JNARDDC, there are some lessons to be taken from the ecosystem of institutional structures and
common platforms available to the steel industry that play a role in its development.
Core Ministry of Steel (Mos) driven bodies
a. Joint Plant Committee – A body which is charged with data collection related to the sector, conducting
various initiatives (e.g. rural consumer demand assessment) and issuing publications of authenticated
Government data. The Apex Committee of the JPC comprises senior Ministry of Steel officials,
representatives of top steel producers, representatives of various industry associations, representatives
of Ministry of Mines, Railways and Statistics. It also houses an Economic Research Unit (ERU) that
conducts specialized research on the steel-based economy. JPC does reasonably good work as a
centralized data bank of the industry.
b. Biju Patnaik National Steel Institute (BPNSI) – A wholly owned MoS body, the Institute was set up as
a center of excellence that will provide technology and skilled / trained manpower to the steel industry
with special focus on the emerging technologies and industry practices. As the steel sector is gearing up
203 Ministry of Steel and its affiliated institution websites.
Vision Document on Aluminium Metal for India 154towards Industry 4.0 and De-carbonization, the BPNSI is playing a significant role in conceptualizing the
building the skill inventory of India to participate in the process.
c. National Institute of Secondary Steel Technology (NISST) – This too is a body like the BPNSI but
focused on secondary steel. It also has a Research & Development mandate. The Institute is managed
by a Board of Governors consisting of members from industry, Educational Institutions, Industrial
Associations & Ministry of Steel.
Industry bodies sponsored by the Ministry
a. INSDAG – The Institute for Steel Development and Growth was mandated primarily to create
awareness amongst potential users about benefits of steel use. It provides advisory service on
materials, construction practices, interpretation of code etc. so that steel is not placed worse
against competitive materials for want of data/ information. INSDAG has played a phenomenal
role in promoting newer applications of steel such as crash-barriers on Ghat roads, sound
mufflers on city flyovers etc.
b. SRTMI – The platform, “Steel Research & Technology Mission of India” (SRTMI) was set up to facilitate
R&D programs of national importance, create state of art facilities to conduct cutting edge research,
develop expertise and skill development, manage human resources and bolster a tripartite synergy
among industry, national R&D laboratories and academic institutes. Indian steel mills continue to import
capex items from European and Chinese OEMs. It was envisaged that SRTMI would drive synergies
across the IITs, CSIR Labs, NITs etc. and make India self-sufficient in steel technology. This is a relatively
recent body and has much more to achieve to prove its utility.
Joint Ventures between public and private sector bodies
Steel Ministry has been a pioneer in championing joint ventures between the public and private sectors. Some
organizations like mJunction (a JV between SAIL and Tata Steel) have been more successful compared to
others like S&T Mining. ICVL is a JV of public sector entities that is trying to solve India’s coking Coal problem.
India recently tried to drive collective negotiation and import of coking Coal, but it fell through. However, these
attempts reflect the desire of driving synergies between individual organizations.
JNARDDC: Technology Centre of Excellence Across Aluminium Value Chain
JNARDDC should be conceptualized as a technology center of excellence and support the growth of not only
primary Aluminium but also downstream sector. With the support of the Department of MSME, programs
could be run that help JNARDDC transition from a centralized organization to one where it can provide R&D
support to the distributed downstream Aluminium clusters that shall develop going forward. This may require
JNARDDC to re-evaluate its role. The following potential exists:
• Assist the Downstream Applications Development taskforce to bring in the technical capacity to
produce them in the country. This may need JNARDDC to invest in equipment that enables more
innovative means of production technologies.
• There are no international Aluminium sector consulting firms in India of the stature of GAMI (now part
of Chinalco) or Innoval (now part of Danielli). Even the steel sector in India has MECON, Railways
sector has RITES, O&G sector has EIL etc. These agencies have achieved such levels of penetration
across the world that they can influence technical specifications for their respective sectors. It is
imperative that JNARDDC fills this vacuum and rediscovers itself to play this role.
• To play these roles it may need to give up non-core areas that it might be engaged in. Such as data
collection for the Ministry or some role in economic policy making. As such a different organization
like JPC for the steel sector, is proposed to be replicated in Aluminium to play such a role.
9.3.1.7 Correcting duties and rectifying the inverted duty structure on critical raw materials
To make the domestic Aluminium producers cost competitive, Govt. can take the following corrective
measures-
Vision Document on Aluminium Metal for India 155Coal GST compensation cess Reimbursement as Incentive
The Coal Cess, initially introduced at INR 50/MT in 2010, has seen successive increases over recent years:
• Raised to INR 100/MT in 2014-15
• Further increased to INR 200/MT in FY16
• Doubled to INR 400/MT in the Union Budget FY17
The introduction of a considerable Coal Cess significantly increases the financial strain on industries that
consume a lot of power. The GST compensation cess on coal should be reimbursed to the purchasers of coal
for CPPs as an incentive for establishing downstream capacities. This incentive could be proportional to the
installed downstream capacities. Such a measure would significantly lower production costs and enhance the
cost competitiveness of the aluminium industry. A similar incentive is already being considered by Ministry of
Coal for setting up coal gasification units.
Utilization of revenue generated from coal cess204
The coal cess, previously known as the "Clean Energy Cess" and "Clean Environment Cess" was introduced
in India to generate funds specifically for renewable energy initiatives through the National Clean Energy and
Environment Fund (NCEEF). Between FY10 and FY18, India collected INR 86,440 crore from this cess.
However, not all of this revenue was allocated to the NCEEF. For instance, in FY16, only 24% of the coal
cess revenue was directed towards the NCEEF to support clean energy and environmental projects. There
is a need for a larger portion of the coal cess revenue to be dedicated to renewable energy and clean
environment technologies.
Revision/exemption of electricity duty
In Odisha, which houses three-quarters of India’s Aluminium production capacity, the Electricity Duty on
Captive Power Plants (CPPs) increased from ₹0.30/kWh to ₹0.55/kWh in 2017. This hike has resulted in a
significant escalation of manufacturing expenses for Aluminium industry. It is advised that the Aluminium
industry’s Captive Power Plants (CPPs), which are notably energy-intensive, should be relieved from the
Electricity Duty. Alternatively, it is suggested that the Electricity Duty be adjusted back to the initial rate of
₹0.30/kWh.
Revision of inverted duty structure and high basic custom duties on raw materials
The presence of an inverted duty regime and elevated basic custom duties on critical raw materials
significantly hampers the competitiveness of local Aluminium manufacturers who rely on imports for their
inputs. Hence, it is recommended to reduce the present Basic Custom Duty of 7.5% on the critical raw
materials like Calcined Petroleum Coke, Aluminium Fluoride, Caustic Soda Lye.
Allowing CPC imports as per the Aluminium capacity
According to Notification No. 68/2023-DGFT dated March 7, 2024, the total permissible import for 2024-25 is
1.9 MT of Raw Petroleum Coke (RPC) for manufacturing Calcined Petroleum Coke (CPC) and 0.5 MT of
CPC for the Aluminium industry. From 2025-26 onwards, the permissible import will be 1.9 MT of RPC for
manufacturing CPC and 0.8 MT of CPC for the Aluminium industry. Removing these import restrictions could
significantly boost the domestic Aluminium industry. By allowing greater imports of RPC and CPC, Indian
Aluminium producers would have more consistent and reliable access to essential raw materials and this
would enable them to plan for expansion in smelting capacity.
9.3.1.8 Resolving infrastructural and logistics issues
To address the critical need for consistent raw material supply chains to maintain the Aluminium smelting
operations without incurring excessive costs, the following measures can be taken-
204 The Evolution of the Clean Energy Cess on Coal Production in India, IISD
Vision Document on Aluminium Metal for India 156Dedicated freight corridor development205
Development of Dedicated Freight Corridors (DFCs) in India can significantly boost the Aluminium industry
in several ways. The introduction of electrified rail lines is set to enable freight trains to operate at triple the
speed and haul larger cargoes. This enhanced speed, affordability, and dependability in transporting goods
are expected to play a significant role in diminishing the elevated expenses associated with logistics. The
advancements will assist India in lowering its disproportionately elevated logistics expenses, which currently
stand at about 13-15% of its GDP. This initiative is aimed at achieving the goal of reducing these costs to 8%,
thereby aligning India’s logistics expenditures closer to the international norms.
Modification in Preferential Traffic Order
As per the Preferential Traffic Order issued from time to time, traffic is classified into four categories viz., A,
B, C and D. Commodities registered in the higher categories have preference over those registered in the
lower categories. As per the Preferential Tariff Order for allotment of wagons (General Order 98, dated
26.03.2024) by Ministry of Railways, Coal, Iron ore, Salt, Fertilizer and POL are included in Priority ‘C’. It is
recommended to include Aluminium & its Raw materials in Category– “C“ from existing Category– “D” in
Railway’s Preferential Traffic Order.
Rationalizing Logistics costs of critical raw materials and wastes by reducing railway freight in a
revenue neutral manner
As per Goods Tariff No. 45 (w.e.f. 01.04.2007)206 , Bauxite has been classified as Base Class 160 and
Alumina as 180. Due to this classification, higher freight charges are applicable on Bauxite and Alumina which
are critical raw materials for Aluminium industry. It is recommended to re-classify Bauxite from class 160 to
lower class 145, and Alumina from class 180 to lower class 170. Also, the waste materials like Red mud and
Fly Ash which are classified as Base class 110, 120A, may be offered by Railways to be transported at
discounted rate. These reductions in railway freight can be done in a revenue neutral approach where Railway
provides reduced freight rates in exchange for a certain offtake pledge from the producer’s side. This could
also help in reducing the environmental impact of these waste materials by promoting their reuse and
recycling. Such agreements could be structured to ensure that the Railways do not incur losses while
supporting industrial producers in managing their waste more effectively.
9.3.1.9 Ensuring consistent supply of Coal to CPPs
Ensuring a consistent supply of Coal for Captive Power Plants (CPPs) is crucial for the Aluminium industry,
which is highly dependent on continuous and intensive power to maintain the production process. To mitigate
the risks of Coal supply shortage to CPPs the following measures can be taken-
Conducting regular NRS Linkage Auctions with sufficient offer to meet increasing demand
The allocation of Coal dispatches should be followed as per the Ministry of Coal circular for Auction of
Linkages, dated 15th February 2016, specifies that Coal should be distributed in the proportion of 75% for
power and 25% for non-power sectors. This directive aims to ensure a balanced supply of Coal to different
sectors, considering their importance and contribution to the country’s infrastructure and economy.
• These policy guidelines are not being complied fully. The quantity allocation of Coal in linkage auction
should consider a bottom-up approach which should consider the open demand for all the CPPs in Non-
regulated sector.
• The disparity in non-coking Coal prices for power and non-power sector should be removed. The notified
price of Coal by CIL for the non-power sector should be at par with that of the power sector.
205 India Takes a Quantum Leap in Building New Freight Corridors, World Bank, January 21, 2021, last accessed on 03-Oct-2024
206 Goods Tariff No.45 Pt. I (Vol. II), Indian Railways, 2nd Mar 2007, last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 157Applying the latest norms of CEA for calculating linkage eligibility
The latest consumption norms issued by CEA consider GCV losses due to stocking, extra moisture and in-
transit pilferage. CIL however continues to use the old norms which do not consider these losses. CIL should
apply the latest CEA norms to calculate Coal Requirement for CPPs.
Resolving rake pendency issue
Despite the commendable efforts from the Ministry of Coal (MoC) and Coal India Limited (CIL), the issue of
linkage rake pendency from different subsidiaries of CIL remains a significant challenge. To address this,
MoC and CIL should consider several strategic measures. Firstly, they could allow the shifting of pending
linkage rakes to other subsidiaries that are better positioned to handle the demand. This flexibility would
ensure a more efficient distribution of resources and reduce delays in coal supply.
Additionally, offering a change of mode of transportation without any additional premium could be highly
beneficial. This would enable consumers to switch to more efficient or available transportation modes without
incurring extra costs, thereby facilitating smoother and faster delivery of coal. Lastly, providing special priority
for consumers owning General Purpose Wagon Investment Scheme (GPWIS) rakes would be a crucial step.
These consumers have already invested in infrastructure to support coal transportation, and prioritizing their
needs would enhance the overall efficiency of the supply chain. Implementing these measures could
significantly alleviate the current challenges and improve the reliability of coal supply to the industry.
Digitalization of activities
Ministry of Coal, Coal India Ltd. may extend digitalization initiatives to other areas like Delivery Order
issuance, financial reconciliation etc.
9.3.2 Key Enablers for Achieving Carbon Neutrality in Aluminium Sector
9.3.2.1 Focus on domestic scrap recycling
India’s aspiration for an Atmanirbhar Bharat (self-reliant India) underscores the importance of a strong
domestic Aluminium industry. Achieving this goal requires a well-balanced strategy that harnesses the
advantages of both primary and secondary Aluminium production. Recycling Aluminium is significantly more
energy-efficient, consuming 95% less energy compared to producing it from raw Bauxite.
Compared with manufacturing through the primary route, recycling of Aluminium consumes significantly less
power (5-7% of the total energy requirement for primary Aluminium). Each tonne of Aluminium manufactured
through recycling results in saving of 5-6 tonnes of Bauxite, 20-25 tonnes of water and ~14000 kWh of energy
(~90-95% of energy savings as per International Aluminium Institute). Also, 1 tonne of Aluminium
manufactured through the recycling process results in savings of ~3,500 kg of CO emission.207
2
Scrap usage in India is diffused and not regulated through standards or end-use restrictions with heavy
reliance on imports. To align with global standards, India should aim to achieve the current global EOL-RR
i.e. 56% for Aluminium by 2047 and enhance job creation opportunities.
To create a sustainable Aluminium ecosystem, it’s crucial to promote higher domestic scrap generation while
strategically managing imports to fill any gaps. Achieving this goal requires a multifaceted strategy. Taking
cue from Brazil’s success, India can establish its own closed-loop Aluminium recycling ecosystem. This would
not only reduce India’s reliance on scrap imports but also maximize the potential of domestically generated
scrap.
Ensuring the quality of Aluminium scrap entering the ecosystem
Some countries Like Malaysia, China and Indonesia have already taken stringent measures to ensure the
quality of scrap entering their country’s ecosystem. India, aiming to align with global best practices and its
commitment to the UN Sustainable Development Goals, particularly Goal 12, should consider developing
207 Assessment of secondary Aluminium industry in India, CRISIL, September 2022
Vision Document on Aluminium Metal for India 158comprehensive guidelines for the import of Aluminium scrap. These guidelines could be modeled after
international standards, such as those recently implemented by the Malaysian Ministry of International Trade
and Industry (MITI), while also considering India’s unique environmental, social, and industrial needs. The
decision regarding the implementation of quality control on aluminum scrap imported by India may be made
by the designated taskforce, which is proposed to be established in this Vision Document (Section 9.4.2).
In this regard, an agency or agencies may be created/ mandated that shall set up large scale state-of-the-art
scrap segregation plants at the point of ingress to provide collective service to secondary Aluminium /
Recycling Industry to create economies of scale. Government may identify the requirement for providing
support / incentive for setting up such units in India / abroad for collection, and segregation of Aluminium
scrap which can be provided to recycler maintaining the quality of scrap.
Govt. can consider developing comprehensive guidelines on based on the recommendation of Resource
Security Taskforce-
• Quality Standards: India should establish clear criteria for the quality of Aluminium scrap, including
minimum percentages of Aluminium content and maximum levels of nonmetallic impurities. Also,
implementing stringent quality checks is required based on international classification guidelines like
Institute of Scrap Recycling Industries (ISRI) is essential.
• Certification Requirement: Indian should make a mandate that all imported Aluminium scrap is
accompanied by a certification from the exporting country, verifying compliance with the established
quality standards.
• Inspection and Monitoring: India should implement a robust inspection regime at designated ports of
entry to ensure that all imported scrap meets the guidelines. This could involve both document verification
and physical inspection of shipments.
EPR with closed loop system
The Ministry of Forest, Environment and Climate Change (MoEF&CC) has released a draft of the Hazardous
and Other Wastes (Management and Transboundary Movement) Second Amendment Rules, 2024. This
draft, issued on August 14, 2024, aims to implement an Extended Producer Responsibility (EPR) framework
specifically for non-ferrous metals. The proposed new rules require producers of non-ferrous metals to
register with the Central Pollution Control Board (CPCB) and meet their Extended Producer Responsibility
(EPR) duties by ensuring their products are collected, recycled, or refurbished.
But it lacks the regulation on closed loop system of scrap collection. The draft should also mandate the
Aluminium product manufacturers to collaborate closely with end-user industries to enhance scrap collection
and sorting, minimizing the mixing of alloys. By returning scrap to the original manufacturer rather than
repurposing it or selling it to scrap dealers, the loop can be closed. Recycling within the same alloy family is
crucial for achieving closed loop circularity as mixing different alloys makes the resulting metal difficult to
reuse for its original purpose and often necessitates adding large amounts of new metal. Some traceability
solutions are required to be implemented in the recycling industry to monitor the recycled materials journey.
Strengthening domestic scrap collection and processing infrastructure
• Ministry of Mines issued a National non-ferrous metal scrap recycling framework, 2020, but the aim
should be to develop a comprehensive National Non-Ferrous Metals (Aluminium and Copper) Scrap
Recycling Policy to address collection, segregation, and recycling in sustainable manner.
• Developing a mechanism for registration of authorized collection centers, segregators, recycling
centers through a national directory.
• Recyclers should be Recycling Industry Operating Standards (RIOS) certified
• Adopting best practices for collection, processing & value addition in recycling process
• Develop or acquire process technologies to separate metals and materials from complex products
• Recycling parks can be created for a specific End-of-life product category
Vision Document on Aluminium Metal for India 159• Introducing recycling-based tax incentives for both industries and public for effective scrap
recovery/collection and remelting in consultation with Ministry of Commerce and Industry
• Setting up of recycling plants should be incentivised.
• Financing of recycling and downstream projects should be liberalised for MSMEs.
• Developing indicators for monitoring and reporting mechanism
• Maintain the record of flow of scrap and recycled metal including finished goods, energy use, water
use and environmental emissions etc.
• Raising customer awareness about environmentally friendly waste management techniques and
providing specific incentives on new products in exchange or scrapping EOL products.
• Creating public awareness program on disposal, handling & recycling schemes.
• Publicity of the policies of MoM concerning the recycling of Non-ferrous metals.
• Alignment with ferrous scrap recycling majors (E.g. MSTC, Tata Steel, Ship-breaking yards etc.) to
leverage their network to obtain separated non-ferrous scrap from combined metal scrap (E.g.
automobile scrap, ship-breaking scrap)
9.3.2.2 Support by Govt. for transition towards Round-the-clock Green Power208
The transition to Round-the-clock renewable power sources for the Indian Aluminium industry is fraught with
challenges. Addressing these issues requires a multifaceted approach, including policy support, technological
advancements, and significant investments in infrastructure. Collaborative efforts between the government,
industry stakeholders, and research institutions will be crucial in overcoming these hurdles and achieving a
sustainable energy transition.
Ensuring Round-the-Clock Energy Supply for Aluminium Smelters through Group Captive Power
Projects209
Aluminium smelters along with PSUs can set up Group Captive Power Projects (GCPPs) with pumped
storage projects integrated with renewable energy sources like solar and wind. Group Captive Power Projects
(GCPPs) may offer a viable solution for Aluminium smelters seeking a stable and sustainable power supply.
Unlike traditional captive plants, GCPPs are owned by multiple users. Such captive user(s) shall hold at least
26% of the ownership in the generating plant. This shared ownership model makes it easier to meet the 51%
captive consumption criteria, where power is sourced in proportion to each shareholder’s equity.
Companies involved in GCPPs can benefit from various state and central government incentives, such as
accelerated depreciation, tax holiday benefits, and exemptions from regulatory levies like Cross Subsidy
Surcharge (CSS) and Additional Surcharge. These incentives can significantly reduce the overall cost of
power. Also, GCPPs provide a stable cost of power, protecting companies from the frequent tariff changes
imposed by Distribution Companies (Discoms). This stability is crucial for Aluminium smelters, which require
a consistent and reliable power supply for their energy-intensive operations.
To facilitate the successful implementation of Group Captive Power Projects (GCPPs) and ensure a stable,
round-the-clock renewable energy supply for Aluminium smelters, the government can play a pivotal role by
establishing a clear and supportive policy framework that encourages the development of GCPPs. This
includes simplifying the approval processes and providing clear guidelines for setting up and operating these
projects.
208 Industry sources
209 Renewable Energy Certificate Mechanism in India, Power System Operation Corporation Limited
Vision Document on Aluminium Metal for India 160Revenue neutral swap contracts
India generates approximately 275 TWh of renewable power annually, while Aluminium smelters require
around 70-80 TWh per year. To mitigate the impact of the Carbon Border Adjustment Mechanism (CBAM),
one effective measure would be to introduce revenue-neutral swap contracts. These contracts would allow
Aluminium smelters to swap renewable power from the grid while selling power from their coal-based captive
power plants (CPPs) back to the grid. This arrangement would enable smelters to utilize renewable energy
for their operations, thereby reducing their carbon footprint and aligning with global sustainability goals.
In the current scenario, double electricity would be charged on sale of electricity generated through coal and
purchase of electricity generated through renewable sources. Additionally, Aluminium producers would need
to pay transmission charges. Hence, to facilitate this initiative, an amendment to the current regulations, would
be necessary. This amendment would enable the legal framework for implementing swap contracts, ensuring
that the transactions are seamless and beneficial for both the smelters and the grid. By enabling Aluminium
smelters to swap renewable power from the grid while selling coal-generated power back to the grid, this
measure would support the industry's green transition. It would also contribute to India's broader goals of
increasing renewable energy usage and reducing carbon emissions, making the Aluminium sector more
competitive and sustainable in the global market.
Renewable Power Transition Strategies for Aluminium Smelters
Transitioning to renewable power is crucial for the sustainability of the Aluminium industry. One effective
strategy involves linking Aluminium smelters with hydropower stations and developing floating solar projects
on nearby water bodies, along with storage systems. These renewable energy sources can create a
dedicated green power line, ensuring a consistent and sustainable energy supply. Additionally, integrating
scrap remelting facilities with these renewable power sources can further enhance the environmental benefits.
Hydropower stations provide a reliable and continuous source of renewable energy, which is essential for the
energy-intensive Aluminium smelting process. By establishing direct linkages with these stations, smelters
can secure a stable power supply while significantly reducing their carbon footprint. Floating solar projects on
water bodies near smelters offer another innovative solution. These projects not only generate clean energy
but also optimize the use of available space, making them a practical addition to the renewable energy mix.
Furthermore, the Nuclear Power Corporation of India Limited (NPCIL) can play a pivotal role in this transition
by developing Small Modular Reactors (SMRs) of 220 MW units specifically for large Aluminium smelters.
With central allocation or Viability Gap Funding (VGF), NPCIL can ensure the financial feasibility of these
projects. SMRs provide a reliable and low-carbon power source, complementing the renewable energy
initiatives and ensuring a continuous power supply even when renewable sources are intermittent.
It is suggested to set-up a large green energy park dedicated to Aluminium sector which can provide round
the clock power to Aluminium plant. This will boost the investment for setting up capacities for Aluminium and
will help industry reducing its carbon emission.
Policy and administrative support from Government
The potential for renewable energy (RE) generation varies across different regions of the country. To support
Aluminium producers, RE generation anywhere in the country should be recognized as power used for
Aluminium production. Policy interventions are needed to ensure the seamless and timely flow of RE power
to Aluminium smelters.
Simplifying procedures for faster inter-state Open Access transactions is crucial. This would allow Aluminium
smelters to use RE power generated in other states for captive use, enabling immediate decisions on power
usage if state discoms do not continue Power Purchase Agreements (PPAs).
Some primary Aluminium producers have already set up RE projects in states like Andhra Pradesh and
Rajasthan. However, the signing of PPAs is often delayed due to approval issues from regulatory
Vision Document on Aluminium Metal for India 161commissions, pending court cases, and unviable tariffs offered by discoms. Long-pending PPA disputes need
to be resolved out of court, with the Government of India acting as a facilitator, to encourage RE power
producers and ensure a stable power supply for Aluminium smelters.
Designation of Aluminium smelters as deemed distribution licensee
Aluminium smelting operations require a constant and reliable energy supply. The shift from thermal to
renewable energy sources, including a mix of wind, hydro, and solar, is impeded by the financial challenges
posed by cross-subsidy surcharges, transmission fees, and other related costs levied by Distribution
Companies (DISCOMs). At present, the transmission fees for acquiring renewable energy via long-term
market agreements are triple the fees charged for thermal power, due to the comparative inefficiency of
renewable technologies. It is critical to designate Aluminium smelters as ‘Deemed Distribution licensees’ to
avoid these additional charges for renewable energy.
Partial Exemption of electricity duty
An exemption from the electricity duty for the use of renewable energy in Aluminium smelters should also be
implemented. Additionally, Aluminium producers should be allowed direct and unrestricted access to the
interstate transmission network, bypassing the losses associated with state transmission systems.
Production Linked Incentive (PLI) Scheme for Aluminium Smelters to Adopt Green Energy
Implementing a PLI scheme specifically for Aluminium smelters can incentivize the adoption of green energy.
This scheme would provide financial incentives to smelters that invest in renewable energy sources such as
solar, wind, and hydro power.
Research & Development (R&D) Grants for New Technologies
Providing R&D grants for the development of modern technologies such as hydrogen energy and pump
storage systems can drive innovation in the Aluminium industry. These grants can support-
• Development of hydrogen as a clean energy source for smelting processes, which can drastically cut down
emissions.
• Investment in pump storage technology to store excess renewable energy, ensuring a stable and reliable
power supply for smelters.
Preference to low carbon indigenous Aluminium in Public Procurements
Giving preference to low carbon indigenous Aluminium in public procurement policies post 2030 can create
a strong market demand for sustainably produced Aluminium. This can be achieved through:
• Implementing policies that require public sector projects to prioritize the use of low carbon Aluminium
produced from domestic scrap/ bauxite or alumina.
• Providing incentives for companies that comply with green procurement standards, thereby promoting the
adoption of sustainable practices across the industry.
9.3.2.3 Assistance for encouraging coordinate/participating in Global scrap supply chains
While primary Aluminium is a great opportunity for India, scrap is undeniably the best method to reduce
energy and carbon intensity of Aluminium production. Also new scrap or process scrap can bring in desirable
alloying elements that makes them a cost-effective source of alloys. Under the threat from CBAM, primary
manufacturers may look at the secondary route actively. In the future it is quite likely that primary players will
also have green energy powered secondary line. The primary players also have the financial heft to ring-
fence the reverse supply chain of scrap domestically. This can be evidenced in the way Tata Steel has
planning to go ahead with regional ferrous scrap-based EAF facilities.
Globally countries are increasingly realizing the importance of scrap and imposing export duty on it to keep it
in the country. Also, there are closed supply chains for new-scrap and special grade alloy scrap that is
controlled by large players like Boeing and Novelis. At the same time, there are many countries that have
reasonable Aluminium production, scrap generation and yet an unorganized scrap collection system. Scrap
Vision Document on Aluminium Metal for India 162will be the future battleground, and Indian players are several years away from generating any meaningful
quantity of scrap domestically. Indian secondary players need to adapt and secure their future.
While there are a few examples of scrap dealers making it big in primary metals in India, it is not possible for
all the secondary players to play that role since per unit capex in primary Aluminium is very high. Therefore,
it is imperative for India to capture the Aluminium scrap generation across the globe, starting with easy to
work-in countries with reasonable amount of scrap generation. While the actual initiative may be taken by
members of MRAI and ASMA or even members of AAI or existing players like MSTC, it is important for
Government to incentivize this. The taskforce that is set up for raw material security should examine the
following topics –
1. Whether this initiative be taken up at the level of Aluminium scrap or non-ferrous scrap or all metal
scrap?
2. The nature of knowledge and advice that needs to be provided to Indian players and the method to
deliver the same with the help of local embassies.
3. Whether the business plan would include collection of scrap and then transfer to India or should the
scrap be processed, segregated, remelted and refined
4. How can Government incentivise these initiatives – through a minority stake or through negative duty
on imported metal of a certain quality made from end-of-life scrap and new/ process scrap
5. Certifications that will enable this scrap or the metal processed from this scrap to be treated as ‘green
Aluminium’
9.3.3 Key Enablers for Value Addition and Export growth
9.3.3.1 Improving domestic manufacturing capabilities of downstream products and
promoting exports
The Aluminium downstream sector in India is predominantly made up of micro, small, and medium enterprises
(MSMEs), with over 150 large and mid-sized companies and around 3,500 MSMEs210. Currently, only about
1.36% of India's MSMEs are engaged in exporting, indicating a gap between the country's export growth and
the internationalization of its MSMEs211.
To unlock the potential of the downstream sector, it is essential to encourage Aluminium industry players to
enhance their production capabilities and focus on exporting value-added Aluminium goods. Promoting the
export of these value-added products offers significant benefits to the country. The pricing of these products
is less affected by market fluctuations due to the extensive processing, refinement, or transformation they
undergo. This differentiation and branding provide greater pricing stability. Additionally, higher value-added
manufacturing contributes to increased employment opportunities within the country. The downstream sector
has the potential to generate 2.5 – 3 times more employment compared to the primary sector.
Multiple steps can be taken in partnership with the private sector to achieve these goals and fully realize the
potential of the Aluminium downstream sector.
Production Linked Incentive Scheme212
There is a significant opportunity to expand domestic downstream capacity, particularly in flat rolled products
and extrusions. Emerging applications include lightweighting for both conventional and electric vehicles in
commercial and personal mobility, Aluminium freight wagons for railways, and can body stock. In the EV
sector, there are specific uses for battery foil, casing, and cooling plates. Additionally, strategic applications
in Aerospace and Defence, as well as passenger coaches for Railways, highlight the urgent need to develop
these capabilities within the country. Based on key parameters like Market size and potential growth, Import
substitution, Export potential and value addition, key product segments have been identified where
210 Assessing The Impact of CBAM and Tariffs in the Indian Aluminium Industry, IIFT, June 2023
211 VIKSIT: An approach for India to achieve USD 1 trillion exports, PwC, August 2024, last accessed on 03-Oct-2024
212 Industry inputs
Vision Document on Aluminium Metal for India 163implementing a Production Linked Incentive (PLI) program can render investments more financially feasible,
to bolster the replacement of imports with domestic products and boost Aluminium usage.
It should be kept in mind that PLI should be given on component of products instead of assembled products.
For example, the current PLI scheme focuses on promoting the manufacturing of complete EVs rather than
their individual components. This approach can indeed lead to increased imports of components, with local
manufacturers primarily engaging in assembling. Shifting the focus of the PLI scheme to incentivize the
production of EV components can shift the entire value chain of EV manufacturing to India.
Also, policy stability for longer duration is crucial for the success of schemes like the PLI. Consistent and
predictable policies help build investor confidence, encourage long-term investments, and allow
manufacturers to plan and scale their operations effectively.
Table 19: Focus Product Segments for Development of Downstream sectors
For import substitution For increasing Aluminium For Strategic application areas
usage
Flat Rolled Products For lightweighting of Aerospace and Defence grade
Auto Fin stock/ Clad Commercial vehicles Plates
(Bulkers, Trailers, Bus)
Foil Stock Sheets
Personal Mobility (EVs, Two
Hard Alloy Rods
wheelers, E-Bicycles)
Circles Railway Passenger coaches
Railway (Aluminium wagons)
AC Fin Extrusions
Electric Vehicles
Extrusions Shell fabrication
Battery Foil
Solar Frames
Battery Casing
Metro 3rd Rail
Cooling plates
Formwork
Can body stock for Aluminium
cans
Table 20: Focus Downstream Aluminium Products
Capex for setting
Focus Downstream up manufacturing Size of Domestic
Remarks
Products plant of 10 kT (USD Market (kT)
Mn)
Flat Rolled Products
Can Stock 20-30 30-50 Import dependency ~90%
Aluminium Composite Panel 20-30 30-50 Import dependency ~50%
Hard Alloy Plates for
20-30 15-25 Import dependency ~70%
Aerospace & Defence Sector
Coil/ Litho 20-30 20-40 Import dependency ~50%
Packaging (Foil for Pharma & Pharmaceutical and
20-30 110-120
Food) packaged food industry
Vision Document on Aluminium Metal for India 164Capex for setting
Focus Downstream up manufacturing Size of Domestic
Remarks
Products plant of 10 kT (USD Market (kT)
Mn)
Pharma (Blisters& strips and prefer sourcing primary
Aluminium foil) Aluminium foils to avoid
Food packaging (Aseptic and any contaminations
Lidding foil)
Extrusion
Solar Frame
Solar Module import of 2
(Extrusion Press for Anodized 25-35 190-250
Bn$ in H1 CY24
Aluminium Panel)
EV (2-Wheeler & Passenger
Vehicle)
(Extrusion Press: 5” - 10” for
Handlebar, Battery Enclosure, 25-35 280-320 -
HVAC Piping etc.)
For MHCV (Extrusion up to
13")
Majorly imported. Govt.
Railways: Vande Bharat
has future plan for
Train/Freight Coach
30-40 10-15 manufacturing of 1 Lakh
(Long extrusion press, Size
Wagons & 200 Vande
13")
Bharat trains
Casting
Auto: Alloy Wheels
30-40 340-360 Import dependency ~50%
(A356.2 grade)
Alloys
2XXX, 6XXX, 7XXX, AA2XXX
Demand is expected to
for Aerospace and Defence - 50-60
grow @10% CAGR
sector
2XXX, 5XXX, 7XXX for Marine Demand is expected to
- 70-80
sector grow @10% CAGR
Others
Demand is expected to
Aluminium Powder - 40-50
grow @5% CAGR
Demand is expected to
Aluminium Foam - 10-15
grow @9% CAGR
Vision Document on Aluminium Metal for India 165Scheme for Technology upgradation
A scheme like ‘Technology Upgradation Fund Scheme’ (TUFS) that was rolled out for textile industry, can be
launched for MSMEs of Aluminium downstream sector. The Capital Investment Subsidy (CIS) under such
schemes can provide financial assistance for the adoption of advanced technologies, which can indirectly
result in substantial cost savings.
Incentive for setting up Downstream Production Capacities
Liberalised financing and incentives in the form of capex subsidy for MSMEs may promote addition of new
downstream capacities thus generating demand for primary and secondary Aluminium and also reducing
reliance on downstream imports.
Enhanced RoDTEP rates213
The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme aims to refund exporters for
taxes, duties, and levies that arise during the manufacturing and distribution of goods, which are not
compensated by any other state, central, or local mechanisms. The RoDTEP rates applicable to Aluminium
smelters in Domestic Tariff Areas (DTAs) have been notified. However, the rates for Special Economic Zones
(SEZs) and Export-Oriented Units (EOUs) have not been announced yet. Together, SEZs and EOUs account
for 30% of India's total Aluminium exports. Announcing rates for these zones is expected to provide a
significant boost to the nation's Aluminium industry.
Development of Aluminium Park
More Aluminium parks can be established close to Aluminium smelters, allowing downstream Aluminium
producers to set up their plants nearby. The government can offer land, water, and electricity at reduced
rates. These nearby downstream facilities can receive hot metal directly from the smelters, significantly cutting
down on energy consumption.
To boost downstream Aluminium production, impetus should be given to the existing proposed/ new
Aluminium Parks to bring them into operation as early as possible as it would not only help in value addition
but also help in employment generation. This will require the primary Aluminium players to take initiative for
developing downstream players in and around their plant by providing land, hot metal, R&D support,
centralized tool room facilities, training facilities, competitive power and other amenities and support to such
players to make it more feasible. Efforts should be made to adequately publicise such parks to attract
investors/ MSMEs for setting up value addition plants.
Skill development
Developing skills is essential for establishing a robust Aluminium ecosystem.
• Programs aimed at enhancing skills in fabrication and precision manufacturing should be implemented.
Industrial Training Institutes (ITIs) and Polytechnics (Diploma) can run specialized courses for fabrication,
assembly and installation of Aluminium doors/ windows/ facades/ roofing collaboration with national skill
development corporation.
• Institutions can offer specialized courses in facade engineering as part of their civil engineering,
mechanical engineering, architecture and diploma programs.
• Offering specific Pharma Foil Conversion courses in various packaging institutes to ensure the availability
of specific skilled labour for this sub-sector.
• Additionally, introducing courses focused on Aluminium metallurgy at the collegiate level would be
beneficial. It’s also important to emphasize non-ferrous extractive metallurgy and circular economy in
educational curriculums to further support this sector.
• The current collaboration of Aluminium sector with Indian Iron and Steel Skill Council is commendable
and should be continued.
213 Aluminium industry seeks govt intervention to notify rates for SEZs, Economic Times, Oct 16, 2023, last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 166Revisiting SCOMET Guidelines
The Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET) list categorizes
items that are subject to export controls, and it includes specific categories of Aluminium products that have
potential military applications. Aluminium products that fall under the SCOMET list need proper authorization
for export, require declaration of end-use, and end-user information. Revisiting these guidelines may
encourage export of Aluminium products.
Acknowledging existing implicit taxes on coal and fuel as effective carbon taxes to address CBAM
The Aluminium industry is already paying carbon taxes in lot of implicit ways like
• GST compensation cess of INR 400 per ton of coal
• Cost incurred due to Renewable Purchase Obligation (RPO)
• Electricity duty
• Taxes on petrol, diesel, and other fuels
The implicit taxes are required to be recognized as effective carbon taxes being paid by Indian Aluminium
industry. Thus, India can better align with the EU’s CBAM requirements, demonstrating that Indian industries
are already subject to carbon costs and also align with India’s upcoming Carbon Credit Trading Scheme
(CCTS).
Considering Total Cost of Ownership in Government Projects
The government's decision-making process, particularly in projects like the Vande Bharat Express with
Aluminium coaches, often focuses on upfront costs rather than the Total Cost of Ownership (TCO). While the
initial investment in Aluminium coaches is higher due to the cost of materials and advanced manufacturing
processes, this approach overlooks the long-term economic and operational benefits. Aluminium coaches,
despite their higher upfront costs, offer significant advantages in terms of durability, reduced maintenance,
and energy efficiency. They are more resistant to corrosion, which lowers maintenance expenses over time,
and their lighter weight results in substantial energy savings during operation. Additionally, the longer lifespan
of Aluminium coaches can further offset the initial investment, making them more cost-effective in the long
run. By considering TCO in decision-making for public procurements, Government can make more informed
decisions that account for these long-term benefits, leading to more sustainable and economically viable
solutions.
9.3.3.2 Sector wise interventions required for promoting Aluminium usage
Table 21: Sector wise interventions for promoting Aluminium usage
Key areas to be addressed Interventions
Building & Construction Sector
• Lack of comprehensive standards for • Creation of a National Fenestration Rating Council of
Aluminium doors, windows and facades India (NFRC India) in similar lines of USA, to create
resulting in low quality, sub-standard norms and testing standards.
product flooding the market.
• Implementing a standard for fenestration in India
• Absence of Energy ratings for doors,
• Preference for use of formwork in government
windows and roofing sheets.
building projects, affordable housing projects, smart
city projects, Pradhan Mantri Awas Yojana etc. may
be considered.
Packaging
Vision Document on Aluminium Metal for India 167Key areas to be addressed Interventions
• Pharmaceutical and packaged food • Strict compliance with BIS guidelines for Aluminium
industry prefer sourcing primary house foil / semi-rigid containers for food packaging.
Aluminium foils to avoid any
• Suitable regulations for ensuring adequate strength in
contaminations
semi-rigid containers for avoiding contamination or
• Lack of standards/ lesser compliance to spillage of food.
existing guidelines.
• A cluster-based strategy could be employed to
support foil converting MSMEs in supplying to the
pharmaceutical industry. They can be given training
on standards, technology upgradation support,
working capital solutions etc.
• Encouraging large companies to procure from foil
converting MSMEs on spot payment basis.
Transport
Railways: Capability gap for manufacturing of • Strong push for adoption of indigenous Aluminium in
large CCD (24") extrusions with length of 25 wagons, semi high-speed trains and metros.
m
Two wheelers/ Passenger Vehicles / • Strong push for light-weighing of vehicles
Commercial Vehicles
• In India medium and heavy-duty vehicles account for
• Weaker emission control targets and only 2% of the vehicles on road but contribute to 40%
enforcement of the total emissions from road transportation214
• Less stringent passenger safety and • Stricter emission norms (Comparison of Emission
control regulations Norms given in Annexure 8) for HDVs in line with rest
of the world
• Mandating efficiency norms for electric vehicles
(EVs), such as power consumption per ton-kilometre
• Stricter axle-load regulations for Commercial
Vehicles like European regulations mandates
lightweighting passenger vehicles- a legal weight
restriction of 3.5 metric tons, including passengers
and cargo215.
• Capability developments via technology tie-ups by
domestic players specially in Brakes and Suspension
(ABS) and Crash Management Systems (CMS)
• Strong push for adoption of Aluminium in govt. buses
/ e-buses
• Driving adoption of Aluminium by OEMs in Crash
Management Systems (CMS), body structures and
EV battery housing
214 Why zero-emission trucks are the future of clean transportation in India, Climate Works Foundation, 9-Mar-2023, last accessed on
01-Oct-2024
215 All Vehicles Should be Made from Aluminum, Alumobility, July 2022, last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 168Key areas to be addressed Interventions
• Standards for driving adoption of Aluminium based
front / rear underbody protection devices in heavy
goods carrier
Electrical, Machinery & Equipment
Lack of domestic capability to manufacture • Domestic companies to develop abilities for
large Aluminium sections manufacturing large profiles (for Welding machines
up to 400 mm CCD, for UPS / Invertors up to 400 mm
CCD)
• Domestic companies should focus on enhancing their
capabilities in cold rolling and indirect pressing to
achieve improved tolerance requirements and
superior surface finishes.
9.3.3.3 Quality Standards for Aluminium
Detailed set of standards for Aluminium products is necessary for prevention of import of sub-standard
products. Also, there is a need for change of perception on the quality of Indian downstream products. Indian
primary Aluminium is recognised as quality product in global export market, but downstream products are not
being recognised as quality products worldwide. Industry needs to work with BIS on suggestions related to
all products generated from Primary and secondary Aluminium covering foreign material content, mechanical
properties (tensile strength, hardness), hazardous material, free from defects, dimension tolerances,
sampling & testing etc. For downstream industry, especially in packaging, Building & Construction there
should be emphasis on stricter enforcement on existing guidelines and new standards in areas where they
don’t exist. For example, BIS guidelines by FSSAI for Aluminium house foil/ semi rigid containers in
packaging. Also, there exists lack in comprehensive standards for Aluminium doors, windows and facades
due to which low quality products are flooding the domestic market. So, there is a need for standardization
on performance criteria for fenestration in the Building & Construction sector.
Also, Quality standards should be developed for utensils and extrusions where target consumers are unaware
of quality issues. Products manufactured from recycled Aluminium should be certified from NABL accredited
laboratory. There is a need for quality standards in cycles being produced in India. The current cycles being
used are of such poor quality that they will be scrapped sooner than later and they will go to landfills.
9.3.3.4 Establish Cluster Based Research and Development Facilities216
Research & Development (R&D) drives the development of new Aluminium alloys and products, enhancing
their properties such as strength, durability, and corrosion resistance. This innovation is essential for meeting
the evolving demands of industries like automotive, aerospace, and construction. Also, Research in the
downstream sector can focus on improving recycling processes and reducing the carbon footprint of
Aluminium production. In developed countries, Aluminium has over 3,000 applications whereas in developing
economies like India, the usage is limited217. R&D enables the exploration of new applications for Aluminium,
opening up additional markets and increasing the material’s versatility. Hence, Govt. should increase the
expenditure focusing on R&D of Aluminium downstream sector.
Cluster-based R&D facilities for Aluminium sector can be developed in India along with focus on Aluminium
parks. These facilities will bring together experts from different fields to work on interdisciplinary projects and
216 Industry sources
217 Need for an Aluminium Policy in India, NITI Aayog, 2017
Vision Document on Aluminium Metal for India 169will help to collaborate among industry partners, academic institutions, and research organizations. Following
clusters in the downstream sector across states may be considered for development of R&D facilities-
i. Rajkot Aluminium Foundry cluster, Gujarat- Around 60 foundry units are situated in the industrial
areas surrounding Rajkot city. These units manufacture precision components for use in automobiles,
machinery, engineering, and electrical equipment through casting and extrusion processes.
ii. Ahmedabad Aluminium Foundry cluster, Gujarat- The Ahmedabad cluster hosts approximately 500
medium and large industries, along with over 23,000 micro, small, and medium enterprises (MSMEs).
The primary products manufactured here are used in textiles, agro machinery, and pumps & valves.
Notable foundries in this cluster include TKT High-tech Cast, C M Smith & Sons, Bhagwati Autocast, and
Ahmedabad Induction Alloys.
iii. Pune Aluminium Casting cluster, Maharashtra- The Pune cluster comprises around 50 Aluminium
casting and allied units. Most of these units serve the automotive sector, as well as other sectors such as
electrical and electronics.
iv. Chennai Aluminium casting cluster, Tamil Nadu- Chennai, the capital of Tamil Nadu, hosts over 200
Aluminium casting units in Thirumudivakkam and Ambattur. This cluster primarily serves large automobile
industries. The die-casting units produce various products, including automotive components such as oil
pumps, gearboxes, water pumps, starter motors, motor covers, assorted engineering equipment, and
various utensil products.
v. Faridabad mixed Engineering cluster, Delhi/NCR- The Faridabad industrial cluster began developing
in the 1950s with the establishment of several large-scale industries producing tractors, auto parts, shoes,
and more. Numerous MSMEs were subsequently set up to support these large plants with products and
processes such as castings, auto components, electroplating, and heat treatment. The cluster now
includes an estimated 12,015 MSME units.
Upcoming Clusters
Defence corridor near Rae
Delhi/ NCR Bareilly, Belgavi and Salem,
Packaging Can
Engineering Cluster
Indore
Gujarat
Auto Component
Al casting, extrusion Cluster
cluster at Rajkot and
Ahmedabad
Maharashtra Chennai
Automotive Cluster Aluminium casting &
Auto cluster
Figure 90: Potential Aluminium clusters for R&D facility development
In addition to R&D in Aluminium applications, India should also invest in developing in-house Aluminium
smelter technologies to lower the CAPEX investment required for setting up new smelters.
Vision Document on Aluminium Metal for India 1709.4 Recommended Institutions and Taskforces
Aluminium is a strategic mineral now for India which needs specialization as well as focus. Since Aluminium
value chain straddles multiple domains (from mining, chemicals, Industries, MSME etc.), the Ministry may
want to implement institutional reforms needed to support this transformation. The following institutions are
proposed in line with the experience of the steel sector:
a. Creation of an “Investment Promotion and Aluminium Strategy Implementation Cell” (IP&ASIC) in
the Ministry led by a JS/ Senior Director Level Officer who sets timelines and monitors progress of
implementation actions – this Cell should debrief the Secretary every fortnight about progress. This cell
will
i. Coordinate with primary and secondary players regularly to understand the on-ground difficulties
being faced by them in the implementation of the strategy.
ii. Coordinate with State Govts. / Central Institutions for timely support to industry after MoU signing.
iii. This cell will also Identify and take decisions on measures like reduction of GST, other duties and
taxes for Primary, Secondary and Downstream, PLI, treating CPPs at par with IPPs, Public
Procurement preference, and other incentives to promote capacity addition across value chain.
iv. The cell would organise Investment Promotion Roadshows/ Conferences/ Seminar for Al and attract
metallurgical OEMs to setup manufacturing base in India.
v. Arrange funding for setting up of Aluminium Data collection and Publication Unit and Institute for
Aluminium Application Growth
vi. Coordination with all taskforces, setting milestones & timelines and monitoring progress of
implementation actions
vii. Policy formulation support can be provided by the Cell by deploying specialized resources.
b. Looking at the experience of steel sector, the following dedicated institutions are needed for Aluminium
sector to promote collaboration, data sanctity across Aluminium value chain and application
evangelization
i. Aluminium Data collection and publication unit (ADCPU) on the lines of Joint Plant Committee
(JPC) under Ministry of Steel. The board members/ management committee of the entity can be
drawn from PSUs and Private sector organizations. The organization can be headed by an
Executive Secretary who can be drawn from the industry. This organization should be responsible
for collating survey based or officially collected periodic data from different agencies across value
chain players and consolidating the same for the Ministry. This unit can serve as the custodian of
official data of the Ministry. The data from primary/ secondary producers, recyclers, special groups
like extruders etc. can all be brought under one umbrella. The JPC also has an Economic Research
Unit (ERU) within itself. However, the decision to have an ERU within the ADCPU is a function of
what tasks are determined for the ERU by the IP&ASIC and whether the right team members are
found to perform such sector-oriented commercial and economic research work. Some of the
residual team members of the taskforces (described later in the document), post implementation of
their mandates can also be assimilated into the ERU. If the ERU is constituted here, then the policy
formulation assistance role of the IP&ASIC may be devolved to the ERU.
ii. Institute for Aluminium Application Growth (IAAG) on the lines of INSDAG under Ministry of
Steel may be set up. INSDAG is a not-for-profit, member-based organization established by the
Government of India (Ministry of Steel) and Major Steel Producers of the Country as a “Society”. It
is engaged in development of advanced and cost-effective design methodologies, technical and
institutional marketing by expanding applications of steel in different segments of the construction
industry, up-gradation of technical skills and know-how, creation of awareness amongst potential
users and communicating the benefits of steel vis-à-vis other competitive materials etc. INSDAG is
also involved actively in formulation and revision of codes and standards for steel use in
Vision Document on Aluminium Metal for India 171construction based on latest developments with Bureau of Indian Standards (BIS) and Indian
Roads Congress (IRC). The IAAG should aim to bring in global knowledge of innovative as well as
standard applications and work with regulators and potential buyers to create an ecosystem more
receptive to the use of Aluminium.
iii. The Aluminium sector in India does not have a technology advisory organization of global repute
and clientele of the nature that is enjoyed by RITES (railways) or EIL (O&G) or MECON (steel) or
even CMPDIL (coal nationally). These organizations have such heft that they can influence
specifications for projects globally. While NRTC and ABSTC own various patents in the Aluminium
sector and have done significant research work it would serve the sector well if JNARDDC should
evolve into a center of excellence to such an extent that it can earn significant part of its revenue
from its research and consulting experience. It may embark on a journey specializing in research
and development and work on aiding the development of downstream products/ end-use
applications for the MSME sector through their research capabilities.
iv. In addition to these institutions, there is a need to create 3 taskforces to enumerate micro actions
for the sector. The deliverable of the task forces can be program-managed by the Investment
Promotion and Aluminium Strategy Implementation Cell (IP&ASIC). The IP&ASIC should draft the
detailed terms of reference and tenure of the task forces. The task forces may include knowledge
partners to help in the collation effort. To propel India’s Aluminium industry to new heights, the
establishment of the following task forces is recommended-
9.4.1 Resource Security Taskforce
Objective/ Deliverable
To ensure a stable and secure supply of raw materials for the Aluminium industry.
• Achieve 50 MTPA bauxite production by FY30 and 150 MTPA by FY47
• Accelerated exploration program for proving 4.9 BnT of Resources; 1 BnT incremental proven
reserve by FY30
• Achieve domestic Scrap Collection of 2 MTPA by FY30 and 7 MTPA by FY47
Activities
• Develop plans for resource acquisition and management.
• Engage with mining companies, suppliers, and government agencies.
• Organize discussions on resource security and supply chain management.
• Promote rapid decision-making and resource allocation.
• Identify and mitigate risks related to resource scarcity and supply disruptions.
• Identification of Suitable clusters and noncontiguous leases of Bauxite for auction as single blocks
• Coordination with State Govt.
• Changes in Laws/Act/Rules e.g. Bauxite pricing, auction of linked ML with greenfield refinery/smelter,
etc.
• Target setting for State DMGs / MECL / NEAs and monitoring exploration
• Setup PMU for exploration activities
• Set Target for bauxite rich state e.g. Odisha, Andhra Pradesh, Chhattisgarh and Jharkhand
• Incentives and schemes for scrap generation
• Expediting operationalisation of bauxite blocks.
Vision Document on Aluminium Metal for India 172• Framing norms for construction, electrical and transport sectors
9.4.2 Applications Development & Demand Generation Taskforce
Objective
To enhance the use of Aluminium in diverse downstream applications, uphold quality standards within the
Aluminium sector, and promote innovation and technological progress in the Aluminium industry.
• Increase consumption intensity (e.g. Aerospace / defence / Auto / packaged food and drinks)
• Introduce New-to-India applications
• Achieve 8 MT and 37 MT Downstream Aluminium Capacity by FY30 and FY47, respectively
Activities
• Setting up of institutions like Institute for Aluminium Application Growth (IAAG) for Demand
generation
• Bringing new product application ideas from international markets
• Develop strategic plans to promote Aluminium usage in sectors like automotive, construction,
packaging, and electronics.
• Engage with industry players, government bodies, and research institutions to foster collaboration.
• Identifying schemes/ incentives/ measures to achieve downstream capacity addition.
• Organize forums and workshops to discuss innovations and market trends.
• Encourage rapid development and implementation of new applications.
• Identify and address challenges in the adoption of Aluminium in downstream sectors.
• Formulate guidelines and standards for quality control of all Aluminium articles (imported and
domestic)
• Collaborate with customs, importers, and quality assurance agencies
• Conduct meetings to discuss quality issues and improvements.
• Decision on the product coverage (finished Aluminium products or even input materials) of Quality
Control Order
• Monitor and address any discrepancies in the quality of imported materials.
• Develop a roadmap for R&D projects focusing on new technologies and processes.
• Partner with research institutions, universities, and tech companies.
• Host conferences and seminars to share research findings and technological advancements.
• Accelerate the adoption of cutting-edge technologies.
• Identify and resolve technical challenges in the industry.
9.4.3 Green Transition Taskforce
Objective
To promote sustainable practices and reduce the environmental impact of the Aluminium industry.
• Reducing carbon intensity for Al sector progressively -
o Current Global Average: 16 tCO /T
2
Vision Document on Aluminium Metal for India 173o Current EU Average: 6 – 7 tCO /T
2
• Generating local demand for Green Aluminium
• CO intensity milestone compliance to reach 10% global trade share by 2047
2
Activities
• Definition of Green Aluminium
• Create strategies for reducing carbon emissions and enhancing energy efficiency.
• Work with environmental agencies and industry leaders.
• Evaluate establishment of Green Energy Parks for RTC power for Aluminium smelters.
• Facilitate discussions on green technologies and sustainable practices.
• Encourage swift implementation of eco-friendly initiatives.
• Evaluation of RPO obligations, Carbon Credit purchase etc. in the context of carbon-tax like levies
• Creating/ mandating an agency or agencies that shall set up large scale state-of-the-art scrap
segregation plants at the point of ingress to provide collective service to secondary Aluminium /
Recycling Industry to create economies of scale.
• Address environmental concerns and regulatory compliance issues.
• Devising strategies for generating domestic demand for Green/ low-carbon Aluminium
9.4.4 Suggested Constitution of Taskforces
The Aluminium sector in India holds significant potential for economic growth and industrial advancement. To
harness this potential, it is crucial to establish well-structured taskforces dedicated to addressing the unique
challenges and opportunities within the sector. These taskforces should be composed of experts from various
fields, including industry leaders, policymakers, researchers, and environmental specialists. Their collective
expertise will be instrumental in formulating strategies that promote sustainable development, enhance
production efficiency, and ensure global competitiveness. By fostering collaboration and innovation, these
taskforces can drive the Aluminium sector towards a more prosperous and sustainable future for India.
Application Development &
Resource Security
Demand Generation Green Transition Taskforce
Taskforce
Taskforce
Chair – Former office-bearer of
Chair – NITI Aayog or MoM INSDAG or Ministry of Steel / Chair – NITI Aayog / MoM
NITI Aayog
Representative from State Govt. Representative of EEPC / DPIIT Representative of MNRE,
(DMGs) or other such bodies as relevant Ministry of Power (MoP), DGCIS
Representative of MoM, MoC&I, Representative of CSIR,
Representatives AAI and ASMA
Finance JNARDDC, NRTC, ABSTC
Representative of ASMA,
Representatives of AAI, MRAI, Representative of World Bank/
International Aluminium
ASMA, FAIUMA, MMTC, etc. GIZ/ JICA etc.
Association
International Research
Representatives from Exploration Organizations (like CSIRO), Representatives of CIL/ NTPC/
agencies e.g. GSI, MECL, etc. Prominent academic institutions, SECI etc.
etc.
Vision Document on Aluminium Metal for India 174Application Development &
Resource Security
Demand Generation Green Transition Taskforce
Taskforce
Taskforce
Representatives of Global OEMs
Green Project Developers like
SMEs as relevant like Fatahunter, ACT, Hycast,
Greenko/ O2 etc.
Warwick, Hencon etc.
Knowledge Partner as relevant SMEs as relevant from other SMEs as relevant from other
for report compilation sectors (like steel) sectors (like steel)
Knowledge Partner as relevant
for report compilation
Vision Document on Aluminium Metal for India 175Annexures
Vision Document on Aluminium Metal for India 176Annexures
Annexure 1: HS Code
HS
Description
Code
7601 Unwrought Aluminium
7602 Waste and scrap, of Aluminium
7603 Powder and flakes, of Aluminium (excl. pellets of Aluminium, and spangles)
7604 Bars, rods and profiles, of Aluminium
7605 Aluminium wire
7606 Plates, sheets and strip, of Aluminium, of a thickness of > 0,2 mm
Aluminium foil, "whether or not printed or backed with paper, paperboard, plastics or similar
7607
backing materials", of a thickness "excl. any backing" of <= 0,2 mm
7608 Aluminium tubes and pipes (excl. hollow profiles)
7609 Aluminium tube or pipe fittings "e.g., couplings, elbows, sleeves"
Structures and parts of structures "e.g., bridges and bridge-sections, towers, lattice masts,
7610 pillars and columns, roofs, roofing frameworks, doors and windows and their frames and
thresholds for doors, shutters, balustrades", of Aluminium
Reservoirs, tanks, vats and similar containers, of Aluminium, for any material (other than
7611 compressed or liquefied gas), of a capacity of > 300 l, not fitted with mechanical or thermal
equipment, whether or not lined or heat-insulated
Casks, drums, cans, boxes and similar containers, incl. rigid or collapsible tubular containers, of
7612
Aluminium, for any material (other than compressed or liquefied gas), of a capacity of <= 300 l
7613 Aluminium containers for compressed or liquefied gas
7614 Stranded wire, cables, plaited bands and the like, of Aluminium
Table, kitchen or other household articles, sanitary ware, and parts thereof, of Aluminium, pot
7615
scourers and scouring or polishing pads, gloves and the like, of Aluminium
7616 Other Articles of Aluminium
Vision Document on Aluminium Metal for India 177Annexure 2: Technological Advancements across Aluminium
Value Chain
Technological Advancements in Alumina Refining and Red Mud
Utilisation/Treatment
Alcoa- Refinery of the future218
Alcoa’s “Refinery of the Future Project” aims to achieve zero-carbon alumina refining. Traditionally, the final
stage of the alumina refinery process, calcination, relies on fossil fuels like natural gas to heat alumina hydrate
crystals and remove water molecules. At Alcoa’s Pinjarra refinery in Western Australia, electric calcination is
being tested as a direct replacement for this method. This pilot project will use renewable energy to power
the calciner, eliminating carbon emissions and capturing residual energy typically lost as steam. This
approach will also eliminate the need for steam venting stacks and lead to significant water savings.
Vedanta-Reuse of Slurry Water219
Vedanta, in collaboration with the Indian Institute of Technology Kharagpur, has developed a process to
extract and recycle the entire volume of water from red mud waste for operational use. This process reportedly
reduces bauxite residue by 30% by removing iron content, while also increasing alumina yield and lowering
the total organic content during the alumina refining process.
EGA220
In 2023, Emirates Global Aluminium (EGA) started building an innovative pilot plant to convert bauxite
residue, a byproduct of alumina refining, into manufactured soil. The plant will use EGA’s proprietary
technology to rapidly neutralize caustic bauxite residue, transforming it into an environmentally safe raw
material within hours, instead of the natural process that takes decades. This optimized red mud will serve
as the primary component for the manufactured soil.
Rio Tinto-Pacific Operations Hydrogen Program221
In 2021, Rio Tinto conducted a technical feasibility study to explore replacing natural gas with green hydrogen
for primary decarbonization. The study also examined the potential reuse of steam produced from hydrogen
combustion and alumina calcination for secondary decarbonization at the refinery. Concluded in 2023, the
findings confirmed that hydrogen is a viable substitute for natural gas without compromising quality.
NALCO222
Currently, NALCO recycles wastewater from bauxite residue, significantly reducing freshwater consumption.
Additionally, they recover soda from caustic red mud ponds. NALCO has also initiated a project with BARC
to use red mud in constructing core catchers, devices designed to contain molten core material in the event
of a nuclear meltdown.
JNARDDC223
JNARDDC under the NITI Aayog Initiative along with other players are conducting research and development
for feasible options for metal extraction and rare earth element enrichment from red mud. It is conducting a
project to transform red mud into cost-effective, high-energy shielding blocks for X-rays and gamma rays,
218 Refinery of the Future, Alcoa, last accessed on 03-Oct-2024
219 Advances in Processing Alumina Refinery Bauxite Residue Waste, Light Metal Age, Feb 27, 2024, last accessed on 03-Oct-2024
220 EGA begins construction first-of-its-kind pilot plant to convert bauxite residue into manufactured soil, EGA, 23 Nov 2023, last
accessed on 03-Oct-2024
221 Rio Tinto pacific Operations Hydrogen program, Rio Tinto, 15 Nov 2022
222 Annual Report, FY24, NALCO
223 Annual Report, FY23, JNARDDC
Vision Document on Aluminium Metal for India 178making them ideal for constructing radiation therapy bunkers, nuclear power plants, and food sterilization
facilities.
Smelter Technology Overview
Several leading technology providers are driving advancements in Aluminium smelting technology worldwide.
An overview of few of the technologies is given in the table below224:
Cell Technology SY-660 NEUI-600 AP-60 RA-550
Technology SAMI NEUI RTA Rusal ETC
Group
Company Xinfa Group Weiqiao Rio Tinto Alcan UC Rusal
Location Liaocheng smelter, Weiqiao smelter, Arvida smelter, Sayanogorsk
Shandong, China Shandong, China Jonquière, smelter, Russia
Quebec, Canada
Current (kA) 600 - 660 600 570-600 550
No. of Operating 3 lines (630) 3 lines (558) Demonstration line Pilot test group (5-
Lines (No. of (38) 8)
cells)
Start-up date 2015 2014 2013 2016
Production 5 4.6 4.4 4.2
(t Al/cell/day)
Production 365 309 N/A 7.6
(t Al/cell/potline)
Production (kt 1150 900 60 N/A
Al/year/smelter)
Current 94 94.3 94.6 94.5
Efficiency (%)
Cell Volts (V) 3.85 3.85 4.15 3.8
Energy 12,205 12,166 13,072 12,000
Consumption
(MWh/kg)
The leading global producers are also developing latest low carbon technologies to achieve net-zero in
Aluminium production. Some of these technologies are:
HalZero225
HalZero, an advanced Aluminium smelting technology developed by Norsk Hydro, involves chlorinating
alumina to produce Aluminium chloride. This process generates carbon dioxide, which is recycled in a closed-
loop system to produce oxygen, released into the atmosphere instead of CO . In late 2023, the construction
2
224 Super-high amperage prebake cell technologies in operation at worldwide Aluminium smelters by Alton Tabereaux, Alcoa Inc
225 https://www.hydro.com/Document/Doc/Integrated%20Annual%20Report%202023_ENG.pdf?docId=594088
Vision Document on Aluminium Metal for India 179of a HalZero test facility was approved, moving the project from laboratory-scale testing to small-scale
industrial trials. Hydro aims to scale this up to a full industrial pilot by 2030.
Elysis226
Elysis, a joint venture between Rio Tinto and Alcoa, is supported by the governments of Quebec and Canada.
Rio Tinto intends to implement this emission-free technology at its Arvida smelter in Quebec. By replacing
carbon anodes with inert anodes in the smelting process, the technology emits oxygen instead of CO . Elysis
2
requires approximately 13,000 kWh of electricity and 0.4 tons of high-quality carbon material to produce one
ton of primary Aluminium through conventional electrolysis.
EX Reduction227
EX-reduction technology, the successor to DX+ ultra technology, consumes 11,500 kWh of electricity. It is
expected to achieve a production rate of 3,765 kg per pot per day.228 Emirates Global Aluminium (EGA) plans
to construct ten pilot EX reduction cells at its Al Taweelah smelter to test and validate their performance,
aiming to industrialize the technology by 2028.
Aluminium Cast house
Almex USA229
For over 25 years, the company has been an independent provider of high-performance aerospace, hard
alloy, and soft alloy Aluminium casting systems and related equipment. Their expertise spans advanced
Aluminium alloy processes, including melt treatment, casting, rolling, extrusion, and specialty thermo-
mechanical processes, which enhance their core competency in casting. A standout feature of Almex’s
offerings is their “Furnace to Finish™” Solutions. The company holds the record for casting both the world’s
largest billet and slab in conventional and high-performance hard alloys.
MQP230
MQP is a leading provider of advanced Aluminium casthouse technology, specializing in high-efficiency grain
refiners. Their flagship product, Optifine, is renowned for significantly improving the quality and cost-efficiency
of Aluminium alloy production. With over 20 years of research and development, MQP serves major
casthouses worldwide, helping them produce high-quality Aluminium for various applications, including
automotive and packaging industries
Hycast231
Based in Sunndalsøra, Norway, Hycast is a leading provider of advanced Aluminium casthouse technology.
Founded in 1990 as a spin-off from Hydro R&D, Hycast specializes in delivering state-of-the-art, fully
automated casting lines. Their expertise includes melt treatment, purification, and vertical DC-casting of
Aluminium alloys. With over 30 years of innovation, Hycast has established a global presence, providing
comprehensive casthouse solutions that ensure high-quality billets and slabs.
RIA Casthouse Engineering232
RIA Casthouse Engineering, based in Germany, is a renowned provider of advanced Aluminium casthouse
technology. Specializing in tailor-made, rail-bound charging and skimming equipment, RIA focuses on
reliability, durability, and safety. Their innovative solutions, including AI-driven charging and skimming
systems and in-furnace dross processing, enhance operational efficiency and metal recovery. With over 20
226 https://informaticsjournals.com/index.php/jmmf/article/download/45481/30415/94327
227 https://Aluminiumtoday.com/news/ega-completes-design-phase-of-next-generation-smelting-technology-readies-pilot-reduction-
cells
228 https://www.ega.ae/media/ewvh4qin/ega-2022-sustainability-report.pdf
229 Technology - Almex USA - Aluminium Casthouse Solutions
230 About - MQP Ltd | High efficiency grain refiners
231 Who we are | Hycast
232 RIA Cast House Engineering About (ria-casthouse-engineering.de)
Vision Document on Aluminium Metal for India 180years of experience, RIA has become a trusted partner for Aluminium billet and sheet ingot cast houses
worldwide, supplying over 80 machines to major Aluminium producers.
Aluminium Heat Treatment Furnaces & Ancillary Equipment
SECO/WARWICK233
SECO/WARWICK is a global leader in heat treatment furnaces and ancillary equipment, serving industries
such as automotive, aerospace, energy, medical, and defense. They offer a wide range of solutions, including
vacuum heat treatment, Aluminium and atmosphere thermal processing, and controlled atmosphere brazing.
Their innovative technologies are designed to enhance efficiency, safety, and environmental sustainability.
With a strong focus on customization, SECO/WARWICK tailors each project to meet specific client needs,
ensuring optimal performance and reliability.
Hencon234
Hencon is a prominent technology provider across the Aluminium value chain, offering specialized mobile
equipment designed to enhance efficiency and safety in Aluminium production. Their innovative solutions
include automated vehicles for transporting hot metal, vacuum systems, and integrated mobile solutions for
cast houses, rolling mills, and extrusion plants. Hencon’s commitment to sustainability and cutting-edge
technology ensures that their equipment meets the highest standards of productivity and reliability. With a
global presence, Hencon continues to support the Aluminium industry by providing robust, custom-made
solutions tailored to the unique needs of their clients.
Aalberts235
Aalberts Surface Technologies is a leading provider of Aluminium metal heat treating services, offering state-
of-the-art solutions to enhance the strength, ductility, uniformity, and longevity of Aluminium products. Their
advanced heat treatment processes, including solution heat treatment, aging, and hot isostatic pressing (HIP),
are designed to meet the stringent requirements of various industries such as aerospace, automotive, and
defense. With a strong focus on technical expertise and quality, Aalberts ensures that their services not only
improve material properties but also optimize production efficiency and reliability.
Jones Metal Products236
Jones Metal Products is a distinguished provider of Aluminium heat treatment technology, offering a
comprehensive range of services to meet the stringent demands of industries such as aerospace and
defense. Their capabilities include aging, air quenching, hot and cold-water quenching, glycol quenching,
annealing, hardening, solution treatment, and stress relieving. With NADCAP accreditation and approvals
from major aerospace companies like Lockheed Martin and Rolls Royce, Jones Metal Products ensures the
highest standards of quality and precision. Their state-of-the-art facilities and experienced team enable them
to deliver reliable and efficient heat treatment solutions tailored to specific customer requirements.
233 Heat treatment furnaces by SECO/WARWICK GROUP (secowarwick.com)
234 Casthouse Solutions – Hencon
235 Heat Treatment for Metals | Aalberts Surface Technologies (aalberts-ht.us)
236 UNDERSTANDING ALUMINIUM HEAT TREATING – Jones Metal Products (jmpforming.com)
Vision Document on Aluminium Metal for India 181Annexure 3: Initiatives Taken by the Global and Domestic
Producers for Decarbonization of Aluminium
Sector237
The major Aluminium industry players of the world have taken the following initiatives for the decarbonization
of the Aluminium sector.
Initiatives undertaken by Global Producers
UC Rusal [Russia]
Progress and greenhouse gas emission reduction goals
In 2018 the Company produced 41.9 MT of gross greenhouse gas emissions (Scope1, Scope2 and Scope3).
In 2023, the gross greenhouse gas emissions came down to 39.5 MT, a reduction of 6.7%. The company
aims to reduce its gross greenhouse gas emissions by at least 23% from its 2018 figure by 2030. The
company aims to achieve net-zero greenhouse gas emissions by 2050.
To fulfil its decarbonization and net-zero goals the company has taken up the following initiatives:
Reduction of process emissions:
Switching to EcoSoderberg Technology
The company has already shifted to EcoSoderberg technology from the traditional Soderberg process as
EcoSoderberg technology enhances the traditional Soderberg process by the usage of improved anode paste
formulations. Thus, lower levels of impurities lead to reduced GHG emissions.
Using Pre-Baked Anodes
Further the company is improving the conductivity of the anodes used in the Aluminium smelting process by
using pre-baked anode technology where anodes will be manufactured separately in a controlled environment
before being used in the electrolytic cells. By 2035, the company aims to use pre-baked anode technology
for all its smelting operations. Pre-baked anodes provide a more stable and consistent performance during
electrolysis, leading to better overall process efficiency in Aluminium smelting. Pre-baked anodes minimize
the generation of volatile compounds like pitch and tar during the baking process, thereby reducing emissions.
They have also Implemented energy-efficient electrolysers used during electrolysis of Alumina in year 2021
which has resulted in electricity savings of 471 million kWh within 2 years.
And now company is developing electrolysers that will reduce electricity consumption by 2,500 kWh/tonne of
Aluminium metal which is currently 13,500 kWh/tonne of Aluminium Metal.
Decarbonizing the power supply
Using Renewable Energy Sources
Currently, the company uses 98.99% hydropower energy for its smelting operations which it aims to increase
further.
Switching to LED Lights
The total reduction in energy consumption following the implementation of energy efficiency improvement
measures in 2023 amounted to 271,577 GJ. The power saved in Windalco, a subsidiary of UC Rusal, by
replacing its older lights with LED equipped with motion sensors that switch on only when needed.
Increased Scrap Recovery
237 Companies’ Annual Reports, last accessed on 10-Aug-2024
Vision Document on Aluminium Metal for India 182The company aims to improve the extraction of scrap Aluminium which will be done by the ultra-high energy
efficient electrolysers that is projected to have an extraction rate of recycled Aluminium of 70%.
Hongqiao [China]
Progress and greenhouse gas emission reduction goals
The company aims to keep on reducing its carbon emissions from 2025 to attain its goals of net zero carbon
emissions by 2050.
To fulfil its decarbonization and net-zero goals the company has taken up the following initiatives:
Reduction of process emissions:
Reduced Emissions during Electrolysis:
The company nearly eliminated the occurrence of undesirable interruptions in the electrolysis process which
occurs when the concentration of Aluminium in the electrolyte drops too low. To achieve that the company
upgraded the online system of anode-current distribution in electric baths and adopted technology such as
single point precise feeding which helps in maintaining the optimum concentration of Aluminium during
electrolysis. These processes helped the company achieve near-zero anode effect thereby reducing 750,000
tonnes of CO emissions per year.
2
Energy efficiency improvement initiative:
Shandong Hongtuo Industrial Co. Ltd, an indirect subsidiary of the group along with a consortium of
universities and organizations developed a technology for Aluminium electrolysis that enhances the cathode’s
performance in the electrolytic cell. Technology involves using composite material for the cathode that
integrates copper and carbon which helps in current efficiency and provides the necessary mechanical
strength and stability. The integration of this technology led the group to save 100 million kWh of power and
100,000 tonnes of carbon emissions since its onset in 2021. This technology is called “Aluminium Electrolysis
Integrated Copper-Carbon Composite Cathode (RuC) Technology Development and Application.
Switching to Electric Vehicles:
The company along with Shandong Transportation is planning to purchase nearly 1000 pure electric trucks
to be used in cargo transportation. This is estimated to reduce Carbon emissions by 120000 tonnes per year.
EGA [UAE]
Progress and goals in decarbonization of Aluminium
In 2021 the greenhouse gas emission intensity for the company was 8 tonnes of CO /tonne of Aluminium
2
produced and in 2022 the greenhouse gas intensity reduced by 4.4% to 7.65 tonnes of CO /tonne of
2
Aluminium. However, the overall CO emissions increased from around 20 MT of CO to 20.27 MT of CO
2 2 2
due to higher quantity of Aluminium produced. The company aims to achieve its net-zero greenhouse gas
emission goal by 2050.
To fulfil its decarbonization and net-zero goals the company has taken up the following initiatives:
Decarbonizing the Power Supply
Increasing energy efficiency
The company improved the energy efficiency of the electrolysis process by incorporating the DX+ ultra
reduction cell technology which operates at higher amperage levels of 500kA thereby allowing more
Aluminium to be produced from the same number of reduction cells. The company also has reduced its
energy consumption in Aluminium smelting by 2.23kWh/kg earlier which was 16.10kWh/kg. With the adoption
of new technology, it is further projected to reduce an additional 2.37kWh/kg.
Switching to renewable energy sources:
Vision Document on Aluminium Metal for India 183EGA signed a power purchase agreement with Dubai Electricity and Water Authority (DEWA) to source 50%
of its electricity from a solar park.
Reduction of Process Emissions
Boiler Electrification
EGA aims to replace traditional fossil fuel boilers with electric boilers to provide heating for steam generation.
The company aims to switch from Natural gas to green hydrogen to meet the thermal energy requirements.
Green hydrogen is produced by electrolyzing water using renewable sources of energy. Adopting green
hydrogen in place of natural gas produced by burning fossil fuels would drastically cut down on greenhouse
gas emission. In 2022 the company used 81000 MWh of solar power to produce more than 57000 tonnes of
Aluminium.
Increasing energy efficiency
EGA has undertaken various energy efficiency projects such as modernizing its equipment to high-efficiency
motors and advanced control systems, to reduce energy consumption. The company has installed heat
recovery systems that capture and reuse waste heat from its processes, reducing additional energy input.
Hydro [Norway]
Progress and goals in decarbonization of Aluminium:
The company aims to reduce its carbon emissions by 10% in 2025 compared to 2018 baseline which was
about 10 MT of CO equivalents emissions. (Scope 1 and Scope 2 emissions). In 2023 the number was 9.35
2
MT of CO equivalents, a 6.5% decrease. The company aims to reduce its carbon emissions by 30% from
2
the 2018 baseline by 2030. The company aims to achieve net zero carbon emission goals by 2050.
To fulfil its decarbonization and net-zero goals the company has taken up the following initiatives.
Decarbonization of the power supply:
Switching to renewable energy sources:
The company operates 40 hydropower plants with a combined output of 13.7 TWh renewable electricity in a
normal year. This ensures that 70% of its electricity used for the production of primary Aluminium is based
on renewable energy.
Increasing energy efficiency:
During 2023, the company replaced the lighting systems at its five Aluminium smelters in Norway with LED
lights equipped with motion sensors that switches on based on needs. This combined with various other
measures saves up to 100 GWh of energy annually.
Changing fuel-type:
The company aims to install several electric boilers for steam generation at its Alumina refinery in Alunorte in
Brazil. This will reduce greenhouse gas emissions by 700,000 tonnes of CO equivalents when completed.
2
Already one electric boiler has been installed. Two more electric boilers will be installed by the end of 2025
which has the potential to reduce emissions by 400,000 tonnes of CO equivalents.
2
Reducing Process Emissions:
Decarbonizing the electrolysis process:
The company aims to replace it’s CO emissions with oxygen emissions during electrolysis by integrating Hal-
2
Zero technology by 2030. In the Hal-Zero process Alumina becomes chlorinated and this process also
produces CO . Instead of releasing them to the atmosphere, it is recycled back in the process and reused in
2
a closed loop. The only by product of the process is oxygen.
Changing fuel-type:
Vision Document on Aluminium Metal for India 184In 2023, the company implemented actions to replace fossil energy in the cast houses with biomethane in its
plant at Sunndal, which will cut emissions by 20,000 tonnes of CO equivalents each year.
2
Recycling the post-consumer scrap:
The company has already produced its green Aluminium product Hydro CIRCAL which is a certified recycled
and low-carbon product of more than 75 percent post-consumer scrap. Hydro CIRCAL has a carbon footprint
of 1.9 tonnes of CO /tonne of Aluminium produced. At Hydro’s recycling plant in Clervaux in Luxembourg, the
2
company has also produced 130 tonnes of near-zero carbon Aluminium with 100 percent post-consumer
Aluminium scrap, Hydro CIRCAL 100R, with a carbon footprint below 0.5 tonnes of CO /tonne of Aluminium.
2
Alcoa [USA]
Progress and goals in decarbonization
In 2015 the greenhouse gas emission intensity was 7.1 tonnes of CO /tonne of Aluminium produced. By 2025
2
the goal of the company is to reduce the emission intensity by 30% from this 2015 baseline. By 2030 the goal
is to reduce the emission intensity by 50% from the 2015 baseline. The goal of the company is to achieve
net-zero emissions by 2050.
To fulfil its decarbonization and net-zero goals the company has taken up the following initiatives:
Reduction of Process emissions
De-carbonization of the smelting process:
The company aims to replace the carbon anodes with inert anodes for its smelting operations by integrating
Elysis inert anode technology which is a joint venture between Alcoa and Rio Tinto with support from several
government and private institutions. Instead of CO only oxygen will be released as a by-product during
2
smelting. To facilitate the process Alcoa is building 450 ka commercial scale trial smelter pots in Quebec,
Canada.
Increasing Scrap Recovery
The company has developed a technology to purify post-consumer scrap to high purity Aluminium called
Astrea. The technology addresses the challenge of recycling contaminated Aluminium scrap which
traditionally can’t be used for high value applications due to impurities.
Rio-Tinto [Canada]
Progress and goals in decarbonization:
In 2018 the scope1 and scope2 emissions for the company were 34.68 MT of CO equivalents. In 2023 the
2
reduction in scope1 and scope2 emissions was 6% below the 2018 baseline which was 32.6 MT of CO
2
equivalents. In 2025 the goal is to reduce the emissions by 15% relative to 2018 levels. The goal is to reduce
scope 1 and scope 2 emissions by 50% compared to the 2018 baselines. The company aims to achieve its
net zero emission goals by 2050. To fulfil its decarbonization and net-zero goals the company has taken up
the following initiatives:
Decarbonization of the Power Supply:
Increasing energy efficiency:
The company aims to reduce its overall energy consumption per ton of Aluminium production by investing
USD 1.01 billion to equip its Aluminium smelter at Complexe Jonquiere in Saguenay, Canada with AP 60
electrolysis technology. The technology is designed to operate at higher current densities and produce up to
60% more Aluminium as compared to traditional smelting cells.
Switching to renewable energy sources:
Rio Tinto signed Purchase Power Agreements to buy 1.1 GW of energy from the Upper Calliope Solar Farm
project where solar energy would be used. This energy would be used to re-power three of the company’s
Vision Document on Aluminium Metal for India 185production assets. The company Approved, subject to regulatory approvals, a 12.4 MW solar photovoltaic
system and a 2.1 MWh battery storage system via long term PPA for Amrun operations. The company has
constructed a 5 MW solar plant pilot project at Kennecott Copper, USA.
Reduction of Process Emissions:
In pilot stage of incorporation of the Elysis Technology jointly developed by Alcoa and the company with
support from various government and private bodies. The technology will release oxygen instead of 𝐶𝑂
2
during smelting operations.
Initiatives Undertaken by the India Producers
NALCO [India]
Progress and goals in decarbonization
In the financial year FY23 the company produced emissions of 11.186 MT of CO equivalents (Scope 1 and
2
Scope 2 emissions) which is 2.5% lower than its emissions of the financial year FY22 which was 11.47 MT
of CO equivalents. NALCO has set its goals for net-zero emissions by 2050.
2
To fulfil its decarbonization and net-zero goals the company has taken up the following initiatives.
Decarbonization of the Power Supply:
Generating renewable energy:
NALCO has operational wind power projects are in Gandikota, Andhra Pradesh (50.4 MW), Luderva,
Rajasthan (47.6 MW), Devikot, Rajasthan (50 MW), and Jath, Maharashtra (50.4 MW). The Company has
installed 850 kWp roof top Solar Power Plants at its premises.
Reduction in energy consumption:
NALCO aims to improve its Aluminium smelting efficiency by carrying out the AP2XN technology on its pilot
scale. The technology improves smelting efficiency via optimized cell design which uses enhanced materials
such as fully graphitized cathode linings and slotted anodes also real time monitoring and control systems to
adjust operational parameters. (Already implemented in 15 pots where a saving of 150 kWh/MT has been
made). The company has saved 4,77,000 kWh through installation of 5,350 LED systems in place of
conventional light fittings since 2021.The company has also replaced old motors with 374 energy efficient IE3
Motors (ranging from 0.37 kW to 55 kW) in FY23 leading to energy savings of 10,25,515.34 kWh/annum.
Reduction of Process Emissions:
De-carbonizing the electrolysis process:
As fully graphitized cathode linings have a lower carbon consumption rate, it is used to replace the semi-
graphitized cathode linings. (916 out of 955 are already running with 44 in progress). Slotted anodes are
being used in all smelter pots as the slots in the anodes facilitates better gas release, particularly oxygen,
during the electrolysis process. This helps in the maintenance of a more stable electrolyte surface and
reduces the risk poof gas bubbles overall which improves efficiency of anode, leading to more efficient
Aluminium production with less CO emission. (1st slot cutting machine is in operation and 2nd slot cutting
2
machine is under installation).
Vedanta [India]
Progress and goals in decarbonization:
In the year 2021 the company produced 60.24 MT of greenhouse emission of CO equivalents. In 2023 the
2
greenhouse emission increased to 65.9 MT of CO equivalents. It is expected that the company will have its
2
carbon peak by 2026 or 2027. By 2030 the target is to reduce greenhouse emissions to 25% from the 2021
baseline. The company aims to achieve its net-zero emission goals by 2050.
To fulfil its decarbonization and net-zero goals the company has taken up the following initiatives.
Vision Document on Aluminium Metal for India 186Decarbonization of the Power Supply:
Switching to renewable energy sources:
Vedanta Aluminium entered into long-term power delivery agreements to source 1,335 MW of renewable
energy, comprising both solar and wind power. This renewable energy will support its operations in Odisha
and Chhattisgarh, enabling the company to significantly reduce its greenhouse gas emissions. By doing so,
Vedanta Aluminium aims to cut approximately 3.2 MT of CO2 annually, marking a substantial step in its
decarbonisation efforts238.
Switching to low-carbon/zero-carbon fuels.
The company uses biomass briquettes which are essentially compressed compounds made from green waste
and other organic materials for power generation at its Alumina refinery in Lanjigarh, Orrisa. This initiative
helps reduce greenhouse gas emissions by over 10000 tonnes of CO annually. The goal is to use 5%
2
biomass briquettes for power generation by 2025.
Reduction of Process Emissions:
De-carbonizing the electrolysis process:
As fully graphitized cathode linings have a lower carbon consumption rate, so it is used to replace the semi-
graphitized cathode lining. The goal is to achieve 100% graphitization of its cathode linings by 2030.
Hindalco [India]
Progress and goals in decarbonization:
In 2023 the greenhouse gas emission intensity of the company was 19.26 tonnes of CO / tonne of Aluminium
2
down by 20.08% from its greenhouse gas intensity of 2011-12 baseline which was 24.1 tonnes of CO /tonne
2
of Aluminium produced. By 2025 the company aims to reduce its greenhouse gas emission intensity by 25%
from its 2011-12 baseline. The company aims to achieve its net-zero emission goals by 2050.
To fulfil its decarbonization and net-zero goals the company has taken up the following initiatives.
Decarbonization of the Power Supply:
Switching to renewable energy sources:
Hindalco and Greenko are working together to develop 375-400 MW of solar and wind power capacity.
Greenko will design, construct and partly own and operate the solar and wind facilities. This endeavor is
expected to reduce carbon emissions by 68000 tonnes/year.
The biomass boiler at Belgavi, Karnataka is to generate 4 MW of power. The company has a 5 MW wind
power plant at Taloja, Maharashtra. The company has a 7.5 MW of Solar Plant at Mouda, Maharashtra with
battery storage.
Reduction of Process Emissions:
Increasing energy efficiency:
A trial was conducted in the Aditya smelter in Sambalpur, Orissa to test a new design for the collector bar
lining which is used to collect electricity. The aim was to validate the ideas of copper insert in the collector
bar that would improve electrical conductivity and can enhance the efficiency of current collection. It can
achieve a reduction of 70 kWh/MT of Aluminium.
A 400-kA low energy hipot design is in the pilot stages in the Mahan smelter at Singrauli, Madhya Pradesh.
It refers to the design of a new pot (electrolysis cell) that operates at a high current of 400 kA thereby reducing
energy consumption. An Aluminium smelter digital twin is being equipped in the Aditya smelter which is a
virtual replica of the physical smelter, encompassing its processes, systems and operations. This digital
238 Vedanta.indd (Aluminiumtoday.com)
Vision Document on Aluminium Metal for India 187model is continuously updated with real-time data from the physical smelter enabling advanced monitoring
thereby optimizing energy consumption.
Increasing Scrap Recovery:
Recycling:
Novelis Hindalco’s subsidiary recycles over 74 million beverage cans each year. The company also
specializes in closed loop recycling in the automotive sector. Which is essentially is a process in which
materials from end-of-life vehicles are recovered and reused in the manufacturing of new vehicles. The
company’s alloys 3015, 3004 and 3005 which are used for building and construction are up to 99% recycled.
Vision Document on Aluminium Metal for India 188Annexure 4: Data Tables
Global Aluminium Production
Table 22: Global Primary Aluminium Production Distribution Change, 2001 and 2023
Region 2001 (MT) 2023 (MT)
Africa 1.37 1.59
North America 5.22 3.90
South America 1.99 1.47
Europe 7.61 6.73
Oceania 2.12 1.88
Gulf Cooperation Council 0.00 6.22
Asia (ex-China) 2.23 4.67
China 3.37 41.67
Others 0.59 2.46
World 24.51 70.58
Table 23: Global Secondary Aluminium Production Distribution Change, 2001 and 2023
Region 2001 (MT) 2023 (MT)
North America 3.51 5.45
South America 0.75 1.75
Europe 2.74 5.55
Oceania 0.12 0.03
Middle East 0.19 0.55
Asia (ex-China) 1.87 7.36
China 1.42 12.77
Others 1.54 2.38
World 12.14 35.85
Global Aluminium Trade
Table 24: Product wise Trade of Aluminium Products by Value, 2023
Product (HS Code) 2023 (USD Billion)
7601 72
7602 21
7604 21
7606 37
7607 15
7610 18
7616 22
Others 26
Total 233
Note: Note: In this report, the import and export data of ITC Trademap has been averaged to demonstrate trade of Aluminium Commodities
Vision Document on Aluminium Metal for India 189Table 25: Global Trade of Unwrought Aluminium by Volume, 2023
Top 10 Importers Imports (MT) Top 10 Exporters Exports (MT)
USA 4.16 Russia 3.91
China 2.68 Canada 2.86
Germany 2.31 UAE 2.28
Japan 2.11 Malaysia 1.97
Malaysia 1.70 India 1.96
Turkey 1.69 Bahrain 1.24
South Korea 1.53 Australia 1.54
Netherlands 1.31 Mozambique 1.45
Italy 1.27 Norway 1.31
Thailand 0.56 Netherlands 0.79
Others 7.72 Others 10.08
World 27.05 World 29.38
Global Bauxite and Alumina Production
Table 26: Global Bauxite and Alumina Production Distribution Change, 2001 and 2023
Bauxite Production (MT) Alumina Production (MT)
Country
2001 2023 2001 2023
Australia 53.80 98.00 16.31 19.00
Guinea 15.10 97.00 0.64 0.33
China 9.80 93.00 4.65 82.00
Brazil 13.03 31.00 3.45 10.00
India 7.86 23.00 2.40 7.30
Indonesia 1.24 20.00 0.00 1.20
Jamaica 12.37 6.00 3.54 1.50
Russia 4.00 5.80 3.05 2.40
Saudi Arabia 0.00 4.60 0.00 1.80
Kazakhstan 3.69 4.30 1.23 1.30
Others 16.11 12.50 16.33 10.67
World 137.00 395.20 51.60 137.50
Global Bauxite Trade
Table 27: Global Trade of Bauxite by Volume, 2023
Top 10 Importers Imports (MT) Top 10 Exporters Exports (MT)
China 141.57 Guinea 109.13
Canada 3.83 Australia 37.70
India 3.78 Brazil 4.73
Ireland 3.43 Turkey 2.64
USA 3.37 Jamaica 2.58
Spain 1.68 Indonesia 1.92
Greece 1.14 Ghana 1.74
Germany 1.10 Sierra Leone 1.24
South Korea 0.29 Montenegro 0.66
Vision Document on Aluminium Metal for India 190Top 10 Importers Imports (MT) Top 10 Exporters Exports (MT)
France 0.29 Malaysia 0.56
Others 1.04 Others 1.44
World 161.53 World 164.34
Global Alumina Trade
Table 28: Global Trade of Alumina by Volume, 2023
Top 10 Importers Imports (MT) Top 10 Exporters Exports (MT)
Canada 4.87 Australia 15.94
Bahrain 3.02 Brazil 7.73
Russia 2.99 Indonesia 2.15
Norway 2.54 India 2.15
India 2.46 Ireland 1.34
UAE 2.46 China 1.26
Malaysia 1.87 Vietnam 1.01
China 1.83 Kazakhstan 0.87
Oman 1.67 Spain 0.56
Iceland 1.65 Jamaica 0.55
Others 9.65 Others 1.93
World 35.01 World 35.50
Global Scrap Trade
Table 29: Global Trade of Scrap by Volume, 2023
Top 10 Importers Imports (MT) Top 10 Exporters Exports (MT)
India 1.83 USA 2.03
China 1.75 Germany 1.18
Germany 1.02 Canada 0.63
South Korea 0.94 United Kingdom 0.60
USA 0.64 Hong Kong 0.58
Italy 0.63 France 0.52
Hong Kong 0.56 Australia 0.48
Thailand 0.49 Japan 0.46
Spain 0.30 Netherlands 0.41
Austria 0.25 Thailand 0.38
Others 3.81 Others 4.90
World 12.23 World 12.18
India’s Alumina Trade
Table 30: India’s Trade of Alumina by Volume, 2023
Top 5 Importers Imports (MT) Top 5 Exporters Exports (MT)
Oman 0.84 Indonesia 1.01
Russia 0.49 Australia 0.73
UK 0.34 Vietnam 0.48
UAE 0.31 Saudi Arabia 0.13
Vision Document on Aluminium Metal for India 191Top 5 Importers Imports (MT) Top 5 Exporters Exports (MT)
China 0.06 China 0.09
Others 0.11 Others 0.03
Total Exports from Total Imports by
2.15 2.46
India India
India’s Scrap Trade
Table 31: India’s Trade of Scrap by Volume, 2023
Top 10 Importers Imports (MT) Top 10 Exporters Exports (MT)
South Korea 0.0050 USA 0.49
China 0.0013 UK 0.16
Bahrain 0.0003 UAE 0.16
Thailand 0.0002 Saudi Arabia 0.15
Nepal 0.0002 Netherlands 0.07
Hong Kong 0.0002 Australia 0.07
Italy 0.0002 Singapore 0.07
Turkey 0.0001 Belgium 0.05
Japan 0.0001 Spain 0.04
Singapore 0.0001 Germany 0.04
Others 0.0004 Others 0.51
Total Exports from Total Imports by
0.008 1.83
India India
India’s Unwrought Aluminium Trade
Table 32: India’s Trade of Unwrought Aluminium by Volume, 2023
Top 10 Importers Imports (MT) Top 10 Exporters Exports (MT)
Malaysia 0.45 Malaysia 0.08
South Korea 0.33 Qatar 0.06
Japan 0.18 UAE 0.05
Mexico 0.14 Oman 0.04
Netherlands 0.10 Bahrain 0.04
China 0.10 Australia 0.02
Taiwan 0.08 Russia 0.02
Italy 0.08 South Korea 0.01
Vietnam 0.08 Turkey 0.01
Turkey 0.08 Nigeria 0.00
Others 0.37 Others 0.03
Total Exports from Total Imports by
1.96 0.36
India India
Vision Document on Aluminium Metal for India 192Annexure 5: Sector wise Growth Drivers
Packaging239
The usage of Aluminium in the packaging sector is projected to grow from 0.2 MT in FY24 to 0.4 MT in FY30
and 1.7 MT in FY47, with a growth rate of 10% from FY24 to FY30 and 12% from FY30 to FY47.
Packaging stands as one of the rapidly expanding industries in India. The India Packaging Market is expected
to reach USD 204 billion by 2025, registering a CAGR of 26% during the period of 2020 to 2025. Forecasts
suggest that the overall revenue is projected to experience a growth rate of 26.1% from 2022 to 2027. As per
Indian Institute of Packaging, over the past ten years, packaging consumption in India has escalated by
almost 200%. This growth can be attributed to the significant rise in consumer markets, particularly in
processed food, alcoholic beverages, personal care, and pharmaceutical industries. Increased Aluminium
demand in this sector is reinforced by the government’s initiative to phase out single-use plastics, which is in
harmony with consumer demand for products packaged in a sustainable manner.
18%
33%
Flexi packaging
8% Rigid packaging
Printed Cartons
8% Glass Bottles
Metal Cans
14% 19% Others
Figure 91: India's packaging market by type
Metal Cans accounts for 8% of Indian packaging industry. Aluminium sheets and foils are widely used in the
packaging industry and some of the key applications include-
User segment Key applications
Aluminium sheets • Aluminium closures (Roll-on Pilfer-proof (ROPP) Caps, lug caps)
• Aluminium beverage cans
• Aluminium aerosol cans
• Collapsible tubes & bottles
Aluminium foil • Packaging for various applications including food, beverages, pharmaceutical,
personal care
• Semi-rigid containers
• Household foil
• Lidding foil, cigarette foil, etc.
Approximately 78% of Aluminium foil produced is utilized in sectors that directly serve consumers, including
packaging materials and everyday household items. In India, the demand for Aluminium foil has seen
significant growth, particularly driven by its use in packaging for pharmaceutical products and various
household purposes.
239 India- packaging industry positive outlook, Care Edge Analytics & Advisory, February 2024
Vision Document on Aluminium Metal for India 193Recent trends show that the Aluminium foil market is continuing to expand, with innovative uses in flexible
packaging that offer benefits such as extended shelf life and product protection. The focus on sustainability
has also led to the development of recyclable and reusable Aluminium foil products, catering to the increasing
consumer demand for eco-friendly options. The industry is expected to maintain its upward trajectory,
propelled by these advancements and the rising awareness of Aluminium foil’s versatile applications.
Aluminium Beverage cans
Aluminium cans are predominantly used for packaging carbonated soft drinks (CSD) and beer, which are the
primary market segments. Recently, other beverages like spring water, wine, and spirits have also begun to
be packaged in Aluminium cans. In the fiscal year FY21, the Indian market for Aluminium beverage cans was
estimated to be around 2 billion units, with CSDs making up about 60% of this figure. Noteworthy recent
developments in this sector include:
• The formation of the ‘Aluminium Beverages Can Association of India’ (ABCAI) by major industry players
such as Hindalco Industries, Ball Beverage Packaging (India), and Can Pack India, aimed at promoting
the adoption of Aluminium cans for beverages in India.
• A policy initiative by the Uttar Pradesh government in March 2020 to replace glass bottles with Aluminium
cans for the sale of Indian Made Foreign Liquor (IMFL).
The surge in the Indian market for Aluminium cans is primarily fueled by the escalating demand within the
food & beverage industry, driven by changing consumer habits, and a spike in the need for personal care
items. Also, the preference for ready-to-eat meals has also elevated the sales of products in cans, thereby
significantly raising the usage of Aluminium aerosol cans. Moreover, government-led initiatives like ‘Make in
India’ and ‘Swachh Bharat Abhiyan’ have catalyzed domestic production, leading to a rise in consumer goods
packaged in Aluminium containers, including aerosol cans. Additionally, the increasing consumer
consciousness regarding the health advantages of packaged foods is expected to further boost the industry’s
growth in the coming years.
Aluminium aerosol cans
India is the second largest producer of Aluminium aerosol cans in Asia after China. In the fiscal year FY20,
the Indian market for Aluminium aerosol cans was approximately 400 million units. India Aluminium aerosol
cans market was estimated to be worth INR 2,400 crore in 2020.240 These Aluminium aerosol products are
predominantly utilized in various segments such as:
• Home care: Common products are air fresheners for rooms and cars, insect repellent sprays, sprays for
rust prevention, butane refills for lighters, spray paints, and sprays for shoe care.
• Personal care: This includes items like deodorants, perfume sprays, shaving creams, hair dyes, and
breath fresheners.
• Pharmaceuticals: They are used for packaging metered-dose inhalers and sprays for pain relief.
ROPP (Roll on pilfer proof) Caps:
Roll-On Pilfer-Proof (ROPP) caps are utilized across various types of containers made of glass, plastic, and
metal. They are particularly prevalent in sectors like alcoholic beverages and pharmaceuticals. While the
competition from plastic caps has impacted their growth to a degree, Aluminium ROPP caps maintain a
competitive advantage in certain areas, notably in the alcoholic beverages and pharmaceutical industries.
There is also an increasing trend in the use of ROPP caps for wine bottles.
It is evident that ROPP caps are essential in ensuring product safety and integrity, especially for sensitive
products like pharmaceuticals and alcoholic beverages. Moreover, the inherent tamper-evident design of
ROPP caps provides added security against product tampering, which is crucial for consumer safety. These
factors contribute to the sustained demand and growth of Aluminium ROPP caps in these sectors.
240 India Aluminium Aerosol Cans Market (2021 - 2027) | Trends, Outlook & Forecast, 6wresearch, last accessed on 01-Oct-2024
Vision Document on Aluminium Metal for India 194Recent Developments241
In 2020, Technocap, a prominent player in the global metal packaging industry based in Italy, formed a
strategic partnership with Oricon, an Indian enterprise, to venture into the Aluminium packaging market of
India. The joint venture, known as Technocap Oriental, is focused on producing lug caps and operates out of
Mumbai.
Technocap Oriental is part of Tecnocap’s broader strategy to penetrate the Indian and Far Eastern markets,
marking a significant step in their international expansion plans. The joint venture is set to control 75% of the
share capital through the acquisition of Oricon’s metal lug business, with Oricon retaining a 25% stake. This
collaboration is expected to leverage mutual synergies and capitalize on market growth opportunities,
delivering high-quality products and services. The establishment of Technocap Oriental underscores the
growing importance of Aluminium packaging solutions in India, reflecting the industry’s shift towards
sustainable and innovative packaging practices.
Also, a recent study by Toxics Link, an environmental research organization found microplastics in Indian salt
and sugar samples242. Plastics used in packaging are a source of microplastic in food. Govt. can implement
policy measures to ban use of plastics and mandates use Aluminium can packaging to prevent microplastic
contamination in food.
Transportation243,244
The automobile sector in India is a significant consumer of Aluminium. Currently, Indian vehicles use much
less Aluminium, around 40-45 kg, compared to the global average of 160-200 kg per vehicle. As the industry
focuses on reducing vehicle weight to improve fuel efficiency, it's anticipated that the use of Aluminium per
vehicle will rise. Additionally, the transition to electric vehicles, which use a substantial amount of Aluminium,
is expected to boost the demand for this metal even more.
The transportation sector’s Aluminium consumption is projected to grow from 0.70 MT in FY24 to 1.4 MT in
FY30 and 4.9 MT in FY47.
India holds a prominent place in the international market for heavy vehicles, being the top producer of tractors,
the second largest in bus production, and the third in heavy truck manufacturing globally. The Indian auto
industry is categorized into four main divisions: two-wheelers, three-wheelers, passenger cars, and
commercial vehicles. The market is predominantly driven by two-wheelers and passenger cars. The value of
India's automobile market is projected at USD 126.67 billion for the year 2024, with an expectation to surge
to USD 187.85 billion by 2029. This growth trajectory represents a CAGR of 8.20% over the five-year period
from 2024 to 2029.245
Automobile manufacturing in India saw a consistent rise until the fiscal year FY19, after which it began to fall
due to a variety of reasons such as economic downturn, escalating fuel prices, and the emergence of the
COVID-19 pandemic at the start of 2020. However, post-pandemic, the Indian automotive industry has
recovered robustly, showing significant expansion in the fiscal years 2023 and 2024.
Table 33: Indian automobile industry: production trends (‘000 units)246
Category FY19 FY20 FY21 FY22 FY23 FY24
Passenger Vehicles 4028 3425 3062 3651 4587 4902
Commercial Vehicles 1112 757 625 806 1036 1066
241 Tecnocap reaches the Indian market with Tecnocap Oriental, Tecnocap Website, last accessed on 01-Oct-2024
242 Your salt and sugar packets contain harmful microplastics: Iodised salt has the highest, rock salt lowest, study finds, Economic
Times, Aug 14, 2024, last accessed on 03-Oct-2024
243 Primary Aluminium Industry, ICRA, Aug 2023, last accessed on 03-Oct-2024
244 Indian Automobiles Industry Analysis, IBEF, Aug-2024, last accessed on 03-Oct-2024
245 Indian Automobile Industry Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029), Mordor Intelligence, last accessed
on 03-Oct-2024
246 Society of Indian Automobile Manufacturers Website, last accessed on 01-Oct-2024
Vision Document on Aluminium Metal for India 195Category FY19 FY20 FY21 FY22 FY23 FY24
Three Wheelers 1269 1133 615 759 856 993
Two Wheelers 24500 21033 18350 17821 19459 21469
Grand Total 30909 26347 22652 23036 25937 28430
India’s auto industry aims to quintuple its vehicle exports in the decade from 2016 to 2026. The country’s
automotive market has significant expansion potential, especially when compared to developed areas such
as the US, China, and Europe, where car ownership rates are between 80-90%, in stark contrast to India’s
8%. The sector has seen substantial investment inflows, with the Indian government anticipating USD 8-10
billion in domestic and international investments by 2023. From April 2000 to December 2023, the industry
has already attracted around USD 35.65 billion in cumulative equity foreign direct investment (FDI).
Passenger cars
India has firmly positioned itself as a key player in the international automobile market. The market value of
Indian passenger cars stood at USD 32.70 billion in 2021 and is projected to climb to USD 54.84 billion by
2027, with a CAGR exceeding 9% from 2022 to 2027. The Indian market has attracted numerous global car
manufacturers. Key industry participants include international brands like BMW, Ford, Honda, Hyundai, and
Volkswagen, as well as Indian companies such as Mahindra & Mahindra, Maruti Suzuki, and Tata Motors.
Prominent auto-component producers include Behr India, Brakes India, Visteon, Subros, Tata Toyo, Taco,
Sanden Vikas, and Pranav Vikas. Global firms like Kia Motors and Volkswagen have redesigned their
products to appeal to India's vast middle-class demographic, intensifying competition with local manufacturers
in this dynamic sector.
Two-wheeler247
The two-wheeler sector in India is experiencing a surge in popularity due to several factors: the cost-
effectiveness and fuel efficiency of these vehicles, the burgeoning population, traffic congestion, limited
parking, and inadequate transport infrastructure. Electric two-wheelers are especially appealing for their lower
emissions. This segment leads the market in sales volume, fueled by a growing middle class and a
predominantly youthful demographic. Seasonal festivals and auspicious days from August to November
typically boost two-wheeler purchases. Additionally, rural areas, home to about two-thirds of India's populace,
contribute to over half of the two-wheeler sales. There's also an increasing trend of using two-wheelers for
long-distance travel.
Commercial Vehicles
Tata Motors and Ashok Leyland are at the forefront of India's commercial vehicle production. The sector also
includes manufacturers like AMW Motors, Daimler, Eicher Motors, SML Isuzu, Force Motors, Mahindra &
Mahindra, and Volvo. Additionally, there's a diverse range of bus and truck coach builders across India, with
JCBL Group, Sutlej Buses, Global TVS, and Ruby Coaches being some of the key names, alongside various
state-run transport companies.
A notable recent development in this segment is Hindalco's foray into the truck and trailer market, capable of
producing 20,000 units annually, with the launch of Aluminium trailers and bulkers in December 2019. These
vehicles, designed to carry cement, chemicals, grains, and other bulk materials, are constructed from a robust
Aluminium alloy. The 34-foot Aluminium trailer is significantly lighter, weighing 2.5 tonnes less than its steel
counterpart, offering a 50% reduction in weight. Initially, Hindalco will supply these Aluminium trailers to
Ultratech Cement, a company within its own group.
247 Indian Automobile Industry Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029), Mordor Intelligence, last accessed
on 03-Oct-2024
Vision Document on Aluminium Metal for India 196Electric Vehicles (EV)248
India is pivoting towards electric vehicles (EVs) as a strategy to cut down on emissions. Aluminium, known
for being both lightweight and strong, is being increasingly used in EVs for parts like battery enclosures,
motors, electronics, and cooling systems. Its ability to dissipate heat, coupled with its lightness and resistance
to corrosion, contributes to reducing the overall weight of EVs, enhancing their efficiency and driving range.
According to the International Aluminium Institute's 2022 report on lightweight automotive materials, the
average amount of Aluminium used in EVs is expected to rise from 360 kg per vehicle in 2021 to 430 kg by
2025. This trend is motivated by the benefits of lighter EVs, which include extended range. The Aluminium
Association also emphasizes the significant benefits of Aluminium in EV batteries and parts, noting that it can
lead to a vehicle weight reduction of as much as 20%, which can substantially increase the vehicle's range-
up to 6% for every 10% reduction in weight.
In a notable achievement, India saw the sale of 1,325,112 EVs in the fiscal year 2024 up to January. The
previous year, FY23, witnessed the sale of 1,183,422 EVs, marking a year-over-year sales growth of ~11%
in FY24. As per projection on the basis of the data from Vahan portal and NITI Aayog’s sales projections, EV
stock in India will become 349 Lakhs in 2030 from 40.1 Lakhs in 2024 and rise to 1519 lakhs in 2050, while
the EV battery market is expected to grow the same timeframe. EV stock in India will grow at a CAGR of 15%
during 2024 to 2050 period. With these growth rates, India is well on its way to becoming the world's largest
EV market by 2030, presenting an investment opportunity exceeding USD 200 billion in the coming 8-10
years.
1519
1246
891
349
40.1
2024 2030 2040 2045 2050
Figure 92: EV Stock forecast in India (Lakhs)
Recent advancements in India's electric vehicle (EV) sector include:
• The FAME (Faster Adoption and Manufacturing of Electric Vehicles) scheme in India is designed to boost
the adoption of electric vehicles (EVs) through a series of strategic measures like providing subsidies to
lower the upfront cost of EVs, making them more affordable for consumers.249
• VinFast and the Tamil Nadu Government inked a MoU in January 2024, pledging a USD 2 billion
investment for an EV initiative in Thoothukudi, with USD 500 million allocated for the initial phase, aiming
for an annual production of 150,000 units.
248 Engineered aluminium: Driving force behind EV efficiency, A.S Ganesan (Economic Times), 08-Dec-2023, last accessed on 03-Oct-
2024
249 How will the government's decision on the FAME 3 initiative impact EV adoption in India?, Dr. Anshul Gupta (Economic Times), 17-
Apr-2024, last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 197• Tata Passenger Electric Mobility Ltd. (TPEM) and Bharat Petroleum Corporation Limited (BPCL) agreed
in December 2023 to set up 7,000 public EV charging stations across the country to improve customer
experience.
• Hero MotoCorp joined forces with Ather Energy in December 2023 to create a widespread fast-charging
network, planning to span 100 cities with over 1,900 charging points.
• SAIC Motor and JSW Group declared a strategic partnership in November 2023, focusing on the
advancement of eco-friendly mobility.
• Mahindra & Mahindra announced a substantial investment of INR 10,000 crore (about USD 1.2 billion) in
December 2022 for a new EV manufacturing facility in Pune.
• In November 2022, Mahindra & Mahindra formed alliances with Jio-bp, Statiq, and Charge Zone to
provide comprehensive charging solutions for their EV lineup.
• The Indian government unveiled the country's first electric double-decker bus in Mumbai in August 2022,
signaling a commitment to revamp the transportation system with a focus on urban mobility and a smaller
carbon footprint. This is part of a broader effort to encourage the adoption of EVs in response to the
demand for cleaner transport options.
With the automotive industry's emphasis on reducing vehicle weight to enhance fuel efficiency and the
anticipated shift towards EVs in the next decade, the demand for two-wheelers and passenger vehicles in
India is expected to significantly boost Aluminium consumption.
Railways
Across US, EU and China, the share of Aluminium in structures of High-speed trains (>200kmph) is 100%; in
Semi high-speed trains (100kmph-200kmph) is 50%-60% and in metro trains is 50%-80%. India stands as a
major player in the global railway industry, with a yearly requirement of 5,500 coaches. The railway sector is
poised to boost its Aluminium usage due to various projects and advancements:
• Aluminium-Bodied Trains250: The launch of lightweight Aluminium-bodied trains, such as the “Vande
Bharat” express, is a key factor in increasing Aluminium use. These trains are built with Aluminium to cut
down on weight, thereby improving their speed and energy efficiency. The Indian government issued a
tender in 2022 to procure 100 Vande Bharat trains with Aluminium coaches. However, they are now
reconsidering this decision due to high costs and the unavailability of domestic technology.
• Metro Rail Networks: The growth of metro rail systems in numerous Indian cities includes incorporating
Aluminium in the construction of stations and the trains themselves.251
• Wagons and Coaches: Research indicates that new Aluminium wagons could slash energy
consumption by up to 60%, as Aluminium halves the weight of a railcar. Each wagon uses about 5 tonnes
of Aluminium, reflecting significant consumption in rolling stock. The Indian government has approved
Aluminium for future trains, following the example of Japan and several European countries that have
been using Aluminium coaches for over a decade and a half.252
• 100% Electrification plan in Railways253: The target to achieve 100% electrification in Indian Railways
is set to significantly increase the Aluminium consumption. The electrification of Railway lines involves
installation of OHE systems which include Aluminium components such as conductors, wires, cantilever
and other fittings.
Some of the recent developments in Indian Railway sector include-
250 Why Indian Railways is unlikely to go for aluminium-bodied Vande Bharat trains, Economic Times, 14-Aug-2024, last accessed on
03-Oct-2024
251 Primary Aluminium Industry, ICRA, Aug 2023, last accessed on 03-Oct-2024
252 The use of Aluminium in Railways, Pragun Jindal Khaitan (Construction Times), 02-Dec-2022, last accessed on 03-Oct-2024
253 Indian Railways on course to 100 per cent electrification, becoming world's largest green network, Economic Times, 08-Apr-2024,
last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 198• The Indian Railway has put out a tender to construct 100 “Vande Bharat Express” trains, marking a shift
from stainless steel to Aluminium, which promises lighter, more energy-efficient trains at a reduced
production cost. This marks the first instance of Indian Railways using Aluminium to build trains.254
• Alstom Transport India is broadening its manufacturing capabilities at Sri City, Andhra Pradesh, aiming
to triple its output to 300 train cars annually. Alstom, which has absorbed Bombardier, secured a deal to
deliver 234 coaches for Mumbai’s Metro Line 4 and its extension.
• A technology transfer agreement has been signed by the Modern Coach Factory (MCF) in Rae Bareli
with a Korean firm, enabling the production of high-quality Aluminium coaches. This agreement covers
the creation of eight different types of passenger coach prototypes, design, manufacturing, and testing,
with mass production set to occur at MCF.
These initiatives underscore the railway sector’s vital contribution to the rise in Aluminium demand in India,
in line with the nation’s infrastructure and eco-friendly goals.
Building & Construction
Aluminium ranks as the metal most frequently used in construction, second only to steel. It's a key component
across various building segments, from commercial structures to residential homes. The primary applications
include window frames, roofing materials, external wall cladding, curtain walls, and structural glazing. It's also
prevalent in prefabricated structures, architectural fixtures, heating and ventilation systems, interior design,
and partitioning. Additionally, Aluminium finds extensive use in industrial equipment, as well as in ladders and
scaffolding for its durability and ease of handling. The construction industry commonly employs two main
types of Aluminium alloys: the 5000 series, which are magnesium alloys known for their increased strength
through work-hardening, and the 6000 series, which are magnesium-silicon alloys that can be heat-treated
to enhance their properties.255
Aluminium consumption in this sector is projected to grow from 0.8 MT in FY24 to 1.4 MT in FY30 and 4.8
MT in FY47.
The Indian government’s focus on the infrastructure sector is expected to significantly increase Aluminium
consumption in the country due to several key initiatives and developments-
• National Infrastructure Pipeline (NIP)256: With an estimated capital expenditure of INR 111 Crore for
the period FY20-FY25, the NIP is set to drive infrastructure sector with flagship schemes like AMRUT,
Gati Shakti, Sagarmala, Bharatmala and others. These projects necessitate the use of Aluminium due to
its lightweight, durability and corrosion resistance.
• Pradhan Mantri Awas Yojana-Urban 2.0: This scheme aims to address the housing needs of one crore
urban poor and middle-class families. It also includes provisions for interest subsidies to facilitate loans
at affordable rates.257
• Smart Cities Mission: The ‘Smart Cities Mission’ launched by Govt. of India focus on creating 100 smart
cities across the country, which will feature modern construction materials. As India continues to urbanize,
the demand for modern housing and public infrastructure will contribute to increased Aluminium
consumption.
• Foreign Direct Investment (FDI) Policy: 100% FDI through automatic route is allowed in construction
development projects which encompasses a wide array of projects such as the creation of townships,
building of homes and commercial spaces, and the construction of essential infrastructure like roads,
bridges, as well as establishments like hotels, resorts, hospitals, schools, and leisure facilities.
Additionally, it includes the development of urban and regional infrastructure and townships. The
254 Indian Railways Invites Tenders To Build All-Aluminum Coaches For Vande Bharat Trains, News 18, 27-Feb-2023, last accessed
on 03-Oct-2024
255 Use of Aluminium In Building Construction, Prof. Madhuri K. Rathi, 01-Apr-2013, last accessed on 03-Oct-2024
256 Budget 2024: Economic development through infrastructure investment, The Indian Express, 22-Jul-2024, last accessed on 03-Oct-
2024
257 Budget 2024: Interest subsidy returns under PM Awas Yojana 2.0 (Urban), Hindustan Times, 23-Jul-2024, last accessed on 03-Oct-
2024
Vision Document on Aluminium Metal for India 199automatic route simplifies the investment process, encouraging greater international investment and
contributing to the country’s development.
• The Real Estate (Regulation and Development) Act (RERA), 2016: This Act seeks to protect
homebuyers as well as help boost investments in the real estate industry.
Electrical
Aluminium usage in India’s electrical sector is projected to grow from 2.4 MT in FY24 to 4.0 MT in FY30 and
12.9 MT in FY47.
Power sector in India
Aluminium and its alloys are essential to the power industry due to their high structural integrity, lightweight
nature, excellent electrical conductivity, great malleability, and lack of magnetic interference. These materials
are crucial in a variety of applications such as electrical cables, conductive busbars, aerial transmission lines,
electric motors, foil coil windings, capacitors for energy storage, components for heating, and devices for
thermal management, among others. Their versatile properties make them a key component in numerous
electrical and electronic applications. The power sector in India consumes Aluminium primarily in the following
ways:
• Transmission and Distribution (T&D) Lines: Aluminium is extensively used in the power T&D sector
due to its excellent conductivity and lightweight properties. Aluminium stands out for its remarkable
adaptability and excellent electrical conductivity. It is second only to copper in terms of conductivity among
common metals. To carry the same amount of current, an Aluminium wire requires a cross section that
is approximately 1.5 times larger, yet it remains twice as light and resistant to corrosion from
environmental factors. This makes Aluminium wire rods ideal for use in transmission lines. Their reduced
weight is particularly beneficial in preventing the sagging of transmission lines, which is crucial for
maintaining reliable power distribution across extensive distances.
• Aluminium Wire Rods: India is one of the largest consumers of Aluminium-based wires and cables, with
an annual consumption of 1.04 MT Aluminium wire rods258. This is crucial for the electrical infrastructure
across the country.259
• Renewable Energy Projects: With the government's ambitious target to achieve 500 GW of renewable
energy capacity by 2030, there will be substantial capacity additions in transmission lines, which will
further drive the demand for Aluminium in the power sector260.
India aims to reach a solar power capacity of 280 gigawatts (GW) by 2030261. As of June 2024, the country's
installed solar energy capacity stands at 85 GW262. To meet this target, India will need to add approximately
32.5 GW of solar capacity each year.
Aluminium plays a crucial role in this expansion, with 72% of the total Aluminium input used in construction
and mounting structures, 22% in panel frames, and 6% in inverters. Specifically, developing 1 GW of solar
power capacity requires about 20 kilo tonnes (kT) of Aluminium solely for panel frames263. So, 650 kTPA of
Aluminium will be required only for frames and total ~4 MT of Aluminium is required to produce frame for the
280 GW solar power.
• Infrastructure Development: As per the National Electricity Plan (NEP) 2022-32 worked out by the
Central Electricity Authority (CEA), the total capacity addition during the period 2022-27 is expected to
258 AL Circle Website, last accessed on 10-Aug-2024
259 Aluminium is the Metal of the Future for the Electrical Sector, P. K. Chatterjee, 12-Aug-2021, last accessed on 03-Oct-2024
260 Economic Survey 2024: Renewable energy investments to fuel India’s green transition, aiming for 500GW by 2030, Saurav Anand
(Economic Times), 22-Jul-2024, 03-Oct-2024
261 India is marching ahead in the Renewable Energy Sector, PIB Mumbai, 30-Jul-2023, last accessed on 03-Oct-2024.
262 Invest India Website, last accessed on 10-Aug-2024
263 Vedanta AL, October 2020 Edition, last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 200be 211,819 MW and capacity addition requirement is projected to be 291,802 MW during 2027-32.264
This expansion is expected to boost Aluminium consumption in the power sector².
In summary, the power sector's demand for Aluminium is driven by the need for efficient and durable materials
for electrical transmission and distribution, and the sector's growth will push for consumption of Aluminium.
Electrical Lighting
The electrical lighting market in India is evolving rapidly- moving from conventional lamps to LED and
Aluminium an indispensable material in the design and function of LED lighting. Market demand for Aluminium
LED channels is experiencing significant growth. The market value of LED lighting in India is projected to be
USD 4.70 billion in the year 2024. It is anticipated to expand to USD 6.77 billion by the year 2030. This
represents a growth trajectory with a CAGR of 6.29% over the period from 2024 to 2030.265
Electric Fans266
Aluminium’s ability to conduct heat and its lightweight properties make it ideal for use in the coils and blades
of electric fans. Ceiling fans are a popular choice in India, with sales reaching around 41 million units each
year, ranking them as one of the most purchased cooling devices. The market for electric fans in India was
estimated at USD 1.94 Billion in 2024 and is projected to grow at a CAGR of 11.5% until 2030, potentially
reaching USD 3.72 Billion. The increasing demand for cost-effective cooling options among the expanding
middle class is driving fan sales, which, in turn, is expected to elevate the demand for Aluminium.
Machinery & Equipment
Aluminium usage in the Machinery & Equipment sector is projected to grow from 0.4 MT in FY24 to 0.6 MT
in FY30 and 2.0 MT in FY47.
Offset printing
The offset printing industry is one of the major users of Aluminium plates. The printing industry in India is
fragmented with over 250000 small, medium and large printers operating in the market. Major printing clusters
are present in Amritsar, Delhi and Faridabad in North; Ahmedabad and Mumbai in west; Bangalore,
Coimbatore, Chennai, Sivakasi, Hyderabad and Vijaywada in South. Demand for offset plates has been
growing, in line with the new offset printing machine installations in the country. TechNova has manufacturing
facilities in Mumbai and has technology tie-up with Agfa to manufacture offset plates.
Even as digital methods gain popularity, offset printing maintains its relevance within the industry, recognized
for its ability to produce bulk print runs efficiently and economically. The expansion of this market is propelled
by ongoing needs for office supplies, marketing items, and packaging across diverse sectors. In 2023, the
commercial printing sector in India was valued at USD 34.5 Billion. Projecting ahead, the IMARC Group
forecasts that this sector will grow to USD 45.3 Billion by 2032, with an expected CAGR of 3% from 2024 to
2032.267
Ventilator
Amid the COVID-19 pandemic, the demand for ventilators fabricated using Aluminium extrusions in India
surged. Domestic ventilator production increased from 2,500 in February 2020 to an estimated 5,500-5,750
in March 2020. The Indian ventilator market is currently valued at USD 103.5 million in 2023 and is expected
to grow at a 5.12% CAGR through 2029.268 In the future, as hospitals adopt more advanced ventilator
technology, the demand for extrusions is expected to rise from this sector.
264 India's power generation sector requires Rs 33 lakh crore investment, 3.78 million professionals by 2032: Economic Times, last
accessed on 03-Oct-2024
265 India LED Lighting Market Size & Share Analysis - Growth Trends & Forecasts Up To 2030, Mordor Intelligence, last accessed on
03-Oct-2024
266 India Electric Fans Market Size, Share and Forecast 2030F, TechSci Research, last accessed on 03-Oct-2024
267 India Commercial Printing Market Size, Share, Trends, Report 2024-2032, IMARC, last accessed on 03-Oct-2024
268 India Ventilator Market By Size, Share and Forecast 2029, TechSci Research, last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 201Consumer Durables
Aluminium usage in the Consumer Durables sector is projected to grow from 0.3 MT in FY24 to 0.50 MT in
FY30 and 1.5 MT in FY47.
Cookware
Aluminium's properties of conducting heat well, being durable, and lightweight make it a favored choice for
manufacturing various kitchen appliances like pressure cookers, toasters, mixing bowls, kettles, and pans.
The cookware market in India has seen a steady rise and is anticipated to continue its upward trajectory,
spurred by an increase in consumer spending, higher per capita income, and population growth across the
country. The lockdowns during the Covid-19 pandemic saw a surge in home cooking and sharing culinary
creations online, leading to increased cookware purchases as restaurants were closed. Moreover, the
growing preference for quality branded products in rural India, where nearly 70% of the population resides, is
also fueling market growth. This trend is expected to further boost the demand for Aluminium in the cookware
industry.
Refrigerators269
Aluminium's superior heat transfer capabilities, resistance to corrosion, and lightness make it a key material
in refrigerator manufacturing. It is particularly utilized in components like evaporator and condenser coils that
require efficient heat conduction.
The refrigerator sector in India is on an upward trajectory, with expectations to expand at a 10.2% CAGR
from 2023 to 2031, potentially reaching a valuation of USD 9,988 Million by 2031, up from USD 4602 Million
in 2023. The surge in urban populations and rising income levels are fueling the demand for refrigerators.
This, in turn, is boosting the need for Aluminium in their production. Furthermore, initiatives like 'Make in India'
and other governmental policies are spurring local manufacturing, which includes refrigerator production and,
by extension, Aluminium usage.
Washing Machine270
Aluminium's robustness, resistance to wear, and lightness are key reasons for its integration into washing
machines. It's employed in crafting parts like alloy belt pulleys and motor wiring, leveraging its mechanical
strength and conductive properties. Additionally, Aluminium is chosen for certain structural elements to lighten
the appliance's overall mass.
The market for washing machines in India is projected to swell from USD 4.44 billion in 2024 to USD 6.27
billion by 2029, advancing at a CAGR of 7.14% over the five-year period. Urban regions are the primary
market for these appliances, driving a significant portion of the sales. The trend towards intelligent washing
machines is expected to gain momentum, spurred by the rapid urbanization and changing consumer
lifestyles. The burgeoning urban demographic, especially those with higher incomes, is poised to bolster
washing machine sales in the coming years, which, in turn, will amplify the demand for Aluminium.
Air conditioners271
Aluminium plays a crucial role in the manufacturing of air conditioner coils, contributing to their enhanced
performance and longevity. In 2023, the valuation of the air conditioner market in India stood at USD 3.15
billion. It is forecasted to grow at a 7.78% CAGR from 2024 to 2032, with expectations to reach USD 6.15
billion by the end of the forecast period. The surge in demand for air conditioners is attributed to the increasing
construction of commercial and residential spaces needing effective cooling systems. This growth trajectory
in the air conditioning sector is anticipated to propel the demand for Aluminium in India as the industry
continues to flourish.
Electronics Hardware
269 India Refrigerator Market Analysis - Industry Report, Astute Analytica, last accessed on 03-Oct-2024
270 Washing Machine Market in India Size & Share Analysis - Growth Trends & Forecasts (2024 – 2029), Mordor Intelligence, last
accessed on 03-Oct-2024
271 India Air Conditioner Market Report and Forecast 2024-2032, Expert Market Research, last accessed on 03-Oct-2024
Vision Document on Aluminium Metal for India 202Aluminium's ability to manage heat and its low weight make it a popular choice for use in electronic devices
like televisions, laptops, and smartphones. As one of the rapidly expanding markets for electronic hardware
globally, India sees a high volume of imports for these products. However, with the government's 'Make in
India' campaign aimed at enhancing local production, the demand for Aluminium within the country's
manufacturing sector is anticipated to rise.
Others
Aluminium usage in the Machinery & Equipment sector is projected to grow from 0.14 MT in FY24 to 0.2 MT
in FY30 and 0.3 MT FY47.
Mainly Aluminium extrusions are used in these sectors for manufacturing of structural works such as frames,
rivets, ribs and I&L sections. Apart from this, Aluminium extrusions in commercial aircrafts are used for
interiors, seats, lighting fixtures, overhead cabins, window panels, brackets etc.
Also, high strength Aluminium alloys are used in military aircrafts, ammunition hardware, missiles and rockets.
41 Ordnance factories across India erstwhile the Ordnance Factory Board (OFB) are the largest producer of
Aluminium profiles for the defence industry. OFB produces solid, hollow and tube sections for Defence and
Aerospace sectors.
The expansion of the Indian Aluminium industry is being propelled by its growing use in the aerospace and
defence sectors. Increased air travel and a wealthier middle class with greater spending power are opening
up strong prospects in the aerospace field. Meanwhile, the 'Make in India' campaign is spurring on domestic
investments and production, which is likely to bridge the current divide between local output and the worldwide
supply of premium Aluminium alloy extrusions, essential for aerospace and defence uses. Furthermore, India
has made considerable strides in its Defence sector, evidenced by a reduction in foreign defence procurement
spending from 46% in FY19 to 36.7% as of December 2022.
Vision Document on Aluminium Metal for India 203Annexure 6: Key Regulatory Change Requirement
Measures to be Taken to Promote Regulatory Change Responsible
Domestic Aluminium Industry Required Stakeholders
Classifying Aluminium as a Core Industry Inclusion of Aluminium in the Ministry of Commerce
Core Industry list through the and Industry
The aluminium industry is crucial for India’s
Office of the Economic
growth, driving sectors like EVs, wind turbines,
Adviser, under the Department
and solar panels. It contributes nearly 2% to
for Promotion of Industry and
India’s manufacturing GDP and generates
Internal Trade (DPIIT),
around 800,000 jobs. Recognizing its strategic
Ministry of Commerce and
importance, it is recommended to designate
Industry.
aluminium as a core industry to secure
benefits like energy allocation and protection Currently Coal, Steel, Cement,
from dumping. Natural Gas, Electricity, Crude
Oil, Fertilisers and Refinery
Products are designated as
Core Industry.
Revenue Neutral Swap Contracts Amendment in Electricity Act, Ministry of Power and
2003 and respective state respective State
India generates ~275 TWh of Renewable
government rules. Government Ministries
power every year. Aluminium Smelters need
70-80 TWh per year.
One measure to mitigate the impact of CBAM
therefore would be to introduce revenue
neutral swap contracts wherein Aluminium
Smelters are allowed to swap renewable
power from the grid while they sell power
from their coal CPPs to the grid.
This will also help smelters to continue
operating coal CPPs as back up to grid
power in case of exigencies, which is
something that the smelters highlight as a
key hurdle to green transition.
Reduction/Exemption of Electricity Duty Amendments in Electricity Act Ministry of Power and
2003, and respective state respective State
Electricity is the largest cost factor in
electricity duty acts like Government Ministries
aluminium production. Consequently, higher
Chhattisgarh Electricity Duty
electricity duties increase production costs,
Act 1949 and Odisha
deterring investors from establishing new
Electricity Duty Act, 1961.
capacities. Reducing or exempting electricity
duties will enhance the profitability of primary
producers, thereby encouraging them to
establish new aluminium smelters.
Vision Document on Aluminium Metal for India 204Measures to be Taken to Promote Regulatory Change Responsible
Domestic Aluminium Industry Required Stakeholders
Stricter Emission Norms for HDVs Revision of Bharat Stage Ministry of Environment,
Emission Standards (BSES) to Forest and Climate
Stricter emission norms for HDVs in line with
ensure stricter emission Change
rest of the world would lead to increased
norms.
aluminium consumption for light-weighting of
vehicles.
Revision of inverted duty structure and Review and amend the Ministry of Commerce
high basic custom duties on raw materials Customs Tariff Act, 1975. and Industry
The inverted duty regime and high basic
custom duties on critical raw materials hinder
the competitiveness of local aluminium
manufacturers. Reducing the Basic Custom
Duty on essential inputs like Calcined
Petroleum Coke, Aluminium Fluoride, and
Caustic Soda Lye is recommended to alleviate
this issue.
Enhanced RoDTEP rates272 Amendments to RoDTEP Ministry of Commerce
rates and Industry
The RoDTEP scheme rates for Special
Economic Zones (SEZs) and Export-Oriented
Units (EOUs) need to be announced as SEZs
and EOUs account for 30% of India's total
Aluminium exports. Announcing rates for
these zones is expected to provide a
significant boost to the nation's Aluminium
industry.
GST compensation cess Reimbursement NA Ministry of Coal
as Incentive for setting up Downstream
Capacities
Aluminium production requires 24 X 7
continuous power supply which is currently
achieved through thermal power. Therefore,
GST Compensation Cess on coal
reimbursement proportionated to the installed
downstream capacity will lead to lower cost of
electricity generation thus encouraging
aluminium producers to invest in downstream
sector.
PLI Scheme for Key Aluminium Product NA Ministry of Commerce
Segments and Industry
272 Aluminium industry seeks govt intervention to notify rates for SEZs, ET Infra (indiatimes.com)
Vision Document on Aluminium Metal for India 205Measures to be Taken to Promote Regulatory Change Responsible
Domestic Aluminium Industry Required Stakeholders
To encourage investment in downstream
sector and reduce import dependence PLI for
key aluminium product segments may be
given.
Agency for Facilitating Global Scrap NA Ministry of Commerce
Supply Chain for Import and Industry
Similar to KABIL, India can setup an agency
to gain control over the global scrap supply
chain to ensure raw material security.
Along with the above changes, Institutional Infrastructures and Taskforces to support the domestic Aluminium
Industry have to be constituted by Ministry of Mines to realise the goals set forth in this vision document.
Vision Document on Aluminium Metal for India 206Annexure 7: Stakeholder Views
Stakeholder Views / Support Required from Government
AAI (NALCO, 1. Classification of Aluminium Industry as a “Core” Industry. This will facilitate the
Hindalco and Aluminium companies for getting priority in coal and railway rake allotments.
Vedanta)
2. As a matter of policy, primary Aluminium sector should be focused due to
higher domestic value addition (and employment generation) and limited scrap
availability.
3. Increasing the custom duty on import of Aluminium Scrap.
4. Preferential allocation of coal blocks for new Aluminium Industries.
5. GST Compensation Cess of INR 400/tonne on coal should be removed.
6. Reduction in custom duty of basic raw materials like caustic soda, CP coke,
Aluminium Fluoride.
7. RPO obligation for Aluminium Industry to be re-looked.
8. Efficiency norms for EV should be mandated by Govt. like Power consumption/
ton km
9. PLI should be given on component of products instead of assembled products.
For example, PLI scheme of EV instead of EV components is increasing
import of components and only the assembling is being done in India.
10. BIS standard needs to be implemented for all downstream and end-use
products and BIS should aim at reaching global standard.
11. In Packaging, Building & Construction Extended Producer Responsibility
(EPR) should be implemented along with ensuring closed loop of scrap
recycling. Closed loop is important from quality perspective.
12. Aerospace and Semiconductor new emerging industries in India, EPR can be
mandated for these industries from the beginning.
13. For transition to Aluminium based products Government is taking decision
based on upfront cost (e.g.: Vande Bharat Aluminium coach) while they should
consider Total cost of ownership.
MRAI 1. Reduce custom Duty on Import of Non-Ferrous Scrap to NIL.
2. In light of the proposed CBAM and the potential ban on the export of scrap to
non-OECD countries, the Government of India should engage with the EU to
ensure the continued inflow of scrap into India.
3. PLI Scheme for Secondary Non-Ferrous Industry
4. Reduce GST on post-consumer scrap to Nil. Since the scrap already includes
the GST suffered at the component stage. Recyclers should be allowed to take
performa credit of 18% of their scrap purchase value. They will then be
required to charge GST on their product at the rate of 18% as applicable.
ASMA 1. Duty of scrap import may be reduced from present duty of 2.5%
2. Duty of primary Aluminium import may be reduced from present duty of 7.5%
3. Duty on downstream Aluminium products, specially Flat Rolled Products may
be increased to 12.5% from present duty of 7.5%
4. RoDTEP rates for primary Aluminium export is slightly higher compared to the
downstream export. The rate for downstream export should be higher
compared to primary Aluminium
5. RoDTEP rates to be enhanced to previous MEIS rates
6. Cluster based R&D facilities can be developed for product innovation
Vision Document on Aluminium Metal for India 207Stakeholder Views / Support Required from Government
7. GST on domestic Aluminium scrap may be reduced to 5% from current GST of
18%. It would be a step in developing an organized scrap collection sector.
8. Setting up of recycling plants should be incentivised.
9. Financing of recycling and downstream projects should be liberalised for
MSMEs.
10. Quality control should be on the end products rather than input materials.
11. Cluster manufacturing unit establishment through government/private player in
PPP mode to allow smaller players to use it as a shared unit.
JNARDDC 1. Increased Funding from the government to support R&D projects and
innovation and encourage private sector involvement in those projects.
2. Simplifying regulatory processes to facilitate R&D activities and reduce
bureaucratic barriers.
3. Investing in state-of-the-art research facilities and equipment to support
advanced R&D.
4. Promoting joint research projects between industry and academic institutions
to drive innovation
Vision Document on Aluminium Metal for India 208Annexure 8: Comparison of Emission Norms273
Recent USA
Emission Australia Europe
Category Japan India (BS-VI)
Standard USA California (ADR79/04) (EURO 6)
Pollutants (Tier 3) (LEV III)
CO 0–2.610 0.621– 0.63 (1.0) 0.5 0.5
2.610 (1.15) (1.0) (1.0)
HC – (0.1) – –
– –
(0.10) (0.1)
NOx – – 0.15, 0.05 (0.06) 0.08 0.08
(0.06) (0.06)
PCs
HC + NOx – – – – 0.17 0.17
(referred
as LDVs in (–) (–)
USA and
HCHO 0 –0.002 0.002 – – – –
California)
NMHC – – 0.024 (0.068) – –
(0.1) (0.068)
NMOG + 0–0.099 0.012– – – – –
NOx 0.099
PM 0–0.002 0.006 0.005 0.0045 0.005 0.0045,
PN – – – – 6 x 1011 6 x 1011
LDVs CO 0–2.610 0.621– 0.63, – 0.5–0.74 0.5–0.74,
2.610 1.15–4.02 (1.0–2.27) (1.0–2.27)
HC – – – – – –
(0.1–0.16) (0.1–0.16)
NOx – – 0.15– – 0.08 –0.125 0.08–0.125,
0.24, (0.06 – (0.06–0.082)
0.05–0.07
0.082)
HC + NOx – – – – 0.17–0.215 0.17–0.215
(–) (–)
HCHO 0–0.002 0.002 – – – –
NMHC – – 0.024, – – –
0.1–0.15
(0.068– (0.068–0.108)
0.108)
NMOG + 0–0.099 0.012– – – – –
NOx 0.099
PM 0–0.002 0.006 0.005– – 0.005 0.0045
0.007,
0.005–
0.007
PN – – – – 6 x 1011 6 x 1011
Recent Tier 3 LEV III – ADR80/ 03 Euro VI BSVI
emission
standard/
pollutants
273 Singh, S., Kulshrestha, M. J., Rani, N., Kumar, K., Sharma, C., & Aswal, D. K. (2023). An overview of vehicular emission
standards. Mapan, 38(1), 241-263.
Vision Document on Aluminium Metal for India 209Recent USA
Emission Australia Europe
Category Japan India (BS-VI)
Standard USA California (ADR79/04) (EURO 6)
Pollutants (Tier 3) (LEV III)
CO 0–4.536 1.988– 2.22, (16) 1.5–4.0 1.5 4.00
4.536
HC – – – 0.46–0.55 0.13 –
NOx – – 0.4, (0.7) 2.0 0.4 3.50
HCHO 0–0.004 0.004 – – – –
NMHC – – 0.17, – – 0.55
HDVs (0.23)
NMOG + 0–0.391 0.093– – – – –
NOx 0.391
CH4 – – – – – 1.10
PM 0–0.006 0.037– 0.01, 0.01 0.02–0.03 0.01 0.03
0.075
PN – – – – 8 x 1011 –
Vision Document on Aluminium Metal for India 210Acknowledgement
The Ministry of Mines extends its deepest appreciation to all the stakeholders who
contributed for the preparation of the “Vision Document on Aluminium Sector”. This
comprehensive report would not have been possible without the invaluable support and
collaboration of the Aluminium Industry.
The Ministry would like to express sincere appreciation to the primary and secondary
Aluminium manufacturers, industry associations, academic institutions, research
organizations, and key experts who provided critical data, insights, and guidance
throughout the process. Your contributions, whether through data sharing, research
findings, or constructive feedback, have enriched the quality and depth of this document.
Your expertise and commitment have been instrumental in shaping this vision.
The Ministry also acknowledges the use of various sources in the preparation of this
report, including industry reports, market analysis, academic research papers, and
government publications. The collective knowledge from these sources has been pivotal
in ensuring the accuracy and comprehensiveness of our vision for the future of
Aluminium in India.
Further appreciation is extended to the team of NALCO and the team of Grant Thornton
Bharat LLP (GTBL) for their significant contributions in the preparation of Vision
Document on Aluminium Sector.
Thank you all for your unwavering support and dedication to advancing the Aluminium
industry. Together, we look forward to a sustainable and prosperous future.
Finally, the Ministry extends its sincere thanks to all others who contributed for the
preparation of this report.
Vision Document on Aluminium Metal for India 211