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BIS quality standards needed for aluminium scrap imports into India
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SME Times News Bureau | 24 Nov, 2020
Experts have emphasized the urgent need for BIS standards for Aluminium
Scrap to address quality, environment and safety concerns, as per global
benchmarks and check the recycling, usage, and imports of sub-standard
scrap.
This will help facilitate fair trade of scrap and will
enable the availability of the right quality of scrap at the right price
and ensure quality end products with zero harmful effects on the
environment.
China's National Sword Policy and other measures to
restrict scrap import has resulted in the diversion of entire global
scrap chain towards India.
This is further fueled by the lack of
sufficient tariff and non-tariff barriers to check the increasing scrap
imports in India, majorly due to low import duties on scrap coupled
with the absence of BIS quality standards for scrap recycling, usage and
imports. As a result, India has overtaken China as the largest importer
of aluminium scrap in the world.
This has not only adversely
impacted the domestic industry but also leading to high consumption of
unchecked, sub-standard scrap due to lack of any quality checks
rendering a huge risk of inferior quality of end-products being used in
critical applications across the nation.
The absence of any
quality standards and import monitoring for scrap has rendered India a
dumping ground for scrap from other countries. Despite the significant
presence of primary Aluminium production capacity and potential to
generate enough domestic scrap, India's consumption of scrap is almost
100% import dependent.
The primary Aluminium industry is facing
a severe threat from the increasing import of Aluminium scrap, as its
share in total imports increased from 52% in FY-16 to 63% in FY-20
resulting in Forex outgo- of $2 billion (Rs 14,000 Crore). This is
posing a large threat to the survival of the capital intensive primary
domestic Aluminium producing industry.
Experts say
unfortunately, India does not have adequate institutional mechanisms to
check proper collection, sorting, and processing of domestic or imported
scrap.
Also, there are no benchmarks in place to check the
quality of the final products produced from such scrap. Institution of
proper standards for Aluminium scraps needs to be the first step to
developing a nurturing ecosystem for the metal in the country. Post
which, measures can be implemented to promote the circular economy and
domestic recycling industry, and the utilization of indigenous scrap
which will go a long way in reducing import dependency.
Countries
with high Aluminium consumption like China and other countries of the
European Union have laid down strict standards and guidelines for scrap
imports and processing & pre-processing of scrap.
These
countries have mandated stringent standards for Aluminium scrap as they
follow ISRI (Institute of Scrap Recycling Industry) guidelines along
with hazardous waste management practices.
For international
trade, the Indian recyclers are also extensively using ISRI
classification. Most scrap recyclers consider ISRI as the globally
accepted classification because it provides global guidelines for
classification of scrap into different types for commercial purpose only
and facilitates the trade. However, ISRI is merely a classification and
not a standard. If global countries would have felt the same, countries
like the EU and China would not have developed separate quality
standards for scrap recycling, usage, and imports.
Most of the
Aluminium scrap finding its way into India is from the USA, which is
diverting large volumes of scrap into our country, as China, EU and
other developed countries have stringent standards. In FY20, India
witnessed the highest ever scrap imports from the US, an increase of
327% over FY-16. The share of scrap imports from the US to India
increased from 8% in FY16 to 24% in FY20.
Equally essential is
the need to address the import duty differential between primary
aluminium and scrap imports along with quantitative restrictions on
import of scrap aluminium. The biggest beneficiary of a robust aluminium
industry would be the economy and the government itself. Thus, the
government should think progressively and look to institute the right
checks to ensure the growth of the sector at large and therefore the
economy. A good starting point for the same will be the announcement of a
National Aluminium Policy focusing on putting in place a strategy for
the optimum usage of scrap aluminium.
Experts say further, there
should be complete clarity with regard to which applications can use
the recycled aluminium products like auto components, utensils, etc.,
and the industries where only primary aluminium are to be used like
electrical transmission/ distribution, aerospace, defence etc.
Additionally, the right processing technologies along with the
implementation of a stringent quality management system would help to
determine the quality of the recycled metal which will result in
increased consumer confidence in the quality of the product.
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Customs Exchange Rates |
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Import |
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Euro
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78.25
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75.65 |
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56.85 |
As on 13 Aug, 2022 |
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