b'SothepicturethatemergesfromIndias aluminum imports originate indias growing construction and pack-all this is of an India that is a low-costcountrieswithwhichIndiahasfreeagingsectorswillseetheiralready producerofaluminummakingitstradeagreementsincludingMa- slim margins squeezed if the govern-exportsattractiveoverseasbutnotlaysia, Thailand, Vietnam, and Southment imposes new import tariffs.low-costenoughfordomesticusersKorea.Thatpercentageislikelyto who can find cheaper product abroad.increase if the government succeedsThe numbers also indicate that the Global trade turmoil is also making In- in concluding an FTA with the Gulfprimary buyers for domestic smelters dian aluminum more attractive over- CooperationCouncil(GCC).Bah- are outside of India. That explains why seas, including in the U.S. rain,aGCCmember,istheworldsexports have been rising so strongly in eighth-largest producer of aluminum,recent years, not only for primary alu-Theseconditionshavesparkedaccounting for 10% of the countrysminum but also for certain specialty calls by some in Indias aluminum in- economy. The kingdom has been tak- aluminum alloys.dustry for an increase in the countrysing steps to expand its aluminum pro-importdutiesonscrapandprimaryduction, but has been hit hard by theIt remains to be seen whether the aluminum.Notsurprisingly,domes- Trump tariffs. The bottom line is that angovernment of India will impose new ticproducerssupportthatmeasure,increase in import duties would likelyimport tariffs on aluminum. If it does, seeking, as they see it, protection fromresult in more imports from countriesthe biggest effect will probably be to low-costimports.Downstreamus- with which India has preferential tradehurtdomesticIndianmanufacturers, ers of aluminum reject the notion ofarrangements. while having little impact on overall increased tariffs, desiring as they doimport patterns. The failure of such a cheaper aluminum. Indias Domestic Demand policywouldalsoexposethefalla-cy of viewing metals like aluminum The Commerce Ministry has takenInaddition,notallofIndiasdo- as unitary products, when, in fact, it up the cause of tariffs, urging the gov- mestic demand can be satisfied by lo- represents many dozens of products, ernment to make it part of its indus- cal producers. Thats because the vastnot all of which, by a long stretch, are trial policy. The ministry is currentlymajorityofIndiasscrapaluminumproducedbyeverymetal-producing supportinga10%rateonbothpri- buyersmanyofthemsmall-andcountry. Better to leave the market to mary aluminum and scrapup frommedium-sized companiesare in theits work, which, in this case, yields the the current levels of 7.5% and 2.5%market for aluminum alloys that areresult that, with the continued growth respectively.not produced in sufficient quantitiesoftheIndianeconomy,bothalumi-by domestic smelters. SMEs that pro- num imports and exports will likely to Critics of the proposed tariffs sayduce manufacturing extrusions, rolledcontinue to rise.it will not make much of a differenceproducts, cables and conductors, auto in the imports picture, because half ofcasings, utensils, and products for In-2019 Collection Breakbulk Shipping 19'