Rising input costs could impede India’s manufacturing ambitions even as domestic aluminium demand is projected to climb from 5.3 million tonnes to 8.3 million tonnes by 2030, a recent study has found. The report by CUTS International said the prevailing import duty structure is unintentionally constraining MSMEs, which play a critical role in the national manufacturing value chain and are central to the vision of Viksit Bharat 2047.

According to the study, the current duty regime keeps domestic aluminium prices higher than global benchmarks, placing Indian manufacturers at a competitive disadvantage. This pricing gap affects fast-growing sectors such as construction, renewable energy infrastructure, electric vehicles and electronics, all of which depend heavily on aluminium inputs.

The report called for rationalising duties, arguing that easing import barriers would lower input costs and enhance the competitiveness of India’s 3,500 aluminium MSMEs. This would help them counter duty-free finished imports entering under various FTAs and expand their presence in extrusions, castings and fabricated components.

Stronger MSME performance would, in turn, support job creation in labour-intensive downstream industries and improve the country’s ability to tap higher-value export markets rather than relying predominantly on primary metal shipments. The study said duty rationalisation should be viewed not as a sector-specific measure but as a strategic industrial priority.