Domestic aluminium manufacturers hire Mecon

01 November 2016

As part of their lobbying efforts to impress upon the government to introduce safeguard measures, state-run engineering consultant Mecon Ltd has been hired by domestic manufacturers to prepare a report for exploring the possibility of introducing minimum import price (MIP) on aluminium products.

The development comes close to the ministry of commerce and industry ruling out imposing MIP on aluminium with the view that the World Trade Organization’s (WTO) non-compliant measure will tarnish the country’s image globally. The ministry of mines also favoured the move and was for completion of pending investigations of safeguard duty and anti-dumping investigations on unwrought aluminium.

Unwrought aluminium is extracted from primary metal or scrap. India imports it from various countries such as the United Arab Emirates, Malaysia, Russia, South Africa, Oman, Qatar, Bahrain and Thailand.

Hired by Aluminium Association of India, a lobby group, which includes firms such as Vedanta Ltd, Hindalco Industries Ltd and National Aluminium Co. Ltd (Nalco), Mecon will shortly submit its report to the ministry of mines.

“The consultancy firm had taken cost data from primary manufacturers and analysed it. Now, downstream industry has recently submitted data to them. After going through all this, Mecon will shortly bring out the report,” said a senior government official on condition of anonymity.

On 21 April, the Directorate General of Safeguards, under the ministry of finance, in its preliminary investigation found that aluminium imports have caused financial losses to the domestic industry and had recommended a provisional safeguard duty of 5% on unwrought aluminium imports for a period of 200 days. However, the Board of Safeguards— chaired by the commerce secretary—deferred it.

Safeguard duty, a WTO-complaint measure, is brought in for a certain time period by the government to help protect domestic industry from cheap imports.

Source – VCCircle