MRAI seeks aluminum recycling tax breaks

Converting aluminum scrap, including imported materials, into secondary aluminum offers numerous advantages to the Indian economy, according to the Material Recycling Association of India (MRAI), but its prominence could increase with changes in tax policies.

Currently, about 40 percent of India’s aluminum production is based on recycled feedstock, according to MRAI, with about 80 percent of that scrap feedstock being imported.

“By converting this scrap into high-value alloys and exporting them, India earns foreign exchange surplus while advancing Net Zero 2070 targets," the association says. “With global demand for green aluminum soaring, led by the European Union’s low-carbon markets, India is positioned to become a reliable supplier of sustainable metal.”

The group says India’s secondary aluminum sector also generates thousands of jobs, including via women’s participation in sorting and quality operations, advancing inclusive and dignified employment in industrial clusters.

To sustain the industry’s momentum, MRAI requests "a progressive and balanced policy framework" that reinforces India’s recycling-led growth.

Reducing the import duty on aluminum scrap from 2.5 percent to no duty on will ensure steady feedstock availability for recycling plants and uninterrupted production, according to MRAI.

Additionally, MRAI says a reduction in the goods and services tax (GST) on aluminum scrap from 18 percent to 5 percent or lower will ease liquidity pressure, encourage formalization, and enhance competitiveness across the value chain.

The group urges simplification of both GST and tax deducted at source systems, saying such moves will support medium-sized and small recyclers, enabling them to expand, invest and create green employment at the grassroots level.

“With stable and forward-looking policies, India’s secondary aluminum industry will continue to power sustainable growth, create green jobs and strengthen India’s leadership in global circular manufacturing," MRAI says.