• Import duty up on Aluminium

Custom duty on primary aluminium increased from 5% to 7.5% while Basic Customs Duty on Other aluminium products increased from 7.5% to 10%. Increase in custom duty shall help to check imports of refined aluminium and products. Aluminium industry in India is facing tough competition from cheap imports into the country while global aluminium prices have fallen 44% to $1500 a tonne in January this year from $2662 per tonne in April 2011.

• Import duty up on Zinc

Basic Customs Duty on Zinc alloys increased from 5% to 7.5%. Increase in custom duty of zinc alloys would help to check rising import dumping and encourage domestic industry.

• Export duty on Bauxite decreased from 20% to 15%

It is negative for aluminium industry as decrease in export duty on bauxite would decrease domestic ore availability

• Basic Customs Duty on Brass scrap decreased from 5% to 2.5%.

• Excise duty structure on disposable containers made of aluminium foils being changed from 2% (without CENVAT credit) or 6% (with CENVAT credit) to 2% (without CENVAT credit) or 12.5% (with CENVAT credit)

• Clean Environment Cess' to impact input costs

The doubling of Clean Energy Cess from Rs 200 to 400 per tonne would further increase the input cost for domestic producers.

Hindustan Copper, Hindalco Industries, Nalco, Hindustan Zinc, Vedanta

Outlook

Indian Aluminium industry has seen a huge surge in imports in recent years. The market share of domestic manufacturers has dropped to 44% in 2014-15 with imports nearly doubling to 15.63 lakh tonne from 8.81 lakh tonne in 2010-11.Further, the domestic capacity of 41 lakh tonne per annum is currently operating at 50%.

Union Budget 2016-17 addressed rising import issue by the industry increasing Custom duty on primary aluminium increased from 5% to 7.5% while Basic Customs Duty on Other aluminium products increased from 7.5% to 10%. Increase in custom duty shall help to check imports of aluminium. A slowdown in China's economy has led to a surge in metals from aluminum to zinc flooding world markets, triggering a rise in trade tensions from the US to Asia. The Indian Govt may also consider a safeguard duty for non ferrous metals similar to steel.

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