The government should consider a host of measures, such as removing the import levy on unwrought aluminium, correcting the inverted duty structure and imposing a 20 per cent export duty on the metal to boost domestic aluminium-based manufacturing, think tank GTRI said on Thursday.

It said that India's tariff policies have created some major distortions in the aluminium value chain - encouraging metal exports, inflating raw material costs for manufacturers and increasing dependence on imported finished products.

Aluminium is one of the foundations of modern industrial economies. It is essential for power transmission, renewable energy, electric vehicles, railways, construction, packaging, aerospace, defence and a wide range of consumer and engineering products.

As India accelerates investments in infrastructure, clean energy, advanced manufacturing, and electric mobility, the demand for aluminium and aluminium-based products is expected to grow rapidly, the Global Trade Research Initiative (GTRI) said.

India is well-positioned to benefit from this opportunity. The country has abundant bauxite reserves, integrated refining and smelting capacity, and access to relatively low-cost power.

However, India is not fully capturing the economic benefits of its aluminium resources, GTRI Founder Ajay Srivastava said.

He said that while primary aluminium production has expanded, downstream industries that convert aluminium into higher-value products face rising pressure.

Current tariff policies allow primary producers to earn high margins while forcing downstream manufacturers to pay elevated prices for aluminium and compete against low-duty imports of finished products, he added.

As a result, India is increasingly exporting aluminium in primary form and importing higher-value aluminium products, he said, adding that this weakens domestic value addition, reduces manufacturing competitiveness, and limits opportunities for investment, employment, and exports.

China has followed a different path. It treats aluminium as a strategic industrial input, discourages exports of primary metal, and channels aluminium into domestic manufacturing.

This has helped China build globally-competitive downstream industries, generate higher exports, and create millions of manufacturing jobs.

"India needs a similar shift in policy," he said, suggesting the removal of the 7.5 per cent duty on unwrought aluminium (raw material) so that Indian manufacturers can access aluminium at globally competitive prices.

He said the government should ensure that duties on raw materials and intermediates remain lower than duties on finished products.

"Review FTA (free trade agreement) concessions that allow finished aluminium products to enter India at low or zero duty," he said, adding that imposition of a 20 per cent export duty on aluminium metal will discourage exports of primary aluminium and encourage domestic value addition.

India should follow China's approach of imposing 30 per cent export duty on aluminium ingots, keeping more aluminium available for domestic manufacturing, he said.

India exports a large share of its aluminium in primary form instead of converting it into higher-value products.

In 2025–26, India exported about $7 billion worth of aluminium and aluminium products. Of this, 61.4 per cent was aluminium metal, and only 38.6 per cent was finished products.

In contrast, the GTRI said, China exported $42.5 billion worth of aluminium products in 2025–26, with 97.2 per cent of exports consisting of value-added products and only 2.8 per cent aluminium metal.

Published on June 18, 2026