MRAI Seeks Aluminum Recycling Tax Breaks to Boost India’s Circular Economy

India’s Aluminum Recycling Industry Calls for Policy Reform

The Material Recycling Association of India (MRAI) has urged the government to introduce aluminum recycling tax breaks that could transform India’s metals industry. The group argues that lower import duties and reduced GST rates on aluminum scrap will unlock significant economic and environmental benefits.

Currently, about 40% of India’s aluminum production depends on recycled feedstock, with nearly 80% of that scrap imported. MRAI highlights that converting this scrap into secondary aluminum alloys supports foreign exchange earnings and advances India’s Net Zero 2070 goals. With global demand for low-carbon or “green aluminum” rising—especially from the European Union—India is well-positioned to become a sustainable metal supplier.

MRAI also notes that the secondary aluminum sector fuels inclusive employment. Thousands of workers, including women engaged in sorting and quality control, contribute to the industry’s social and economic footprint. As a result, aluminum recycling plays a dual role: driving growth while supporting equitable job creation in industrial clusters across India.

Aluminum Recycling Tax Breaks Could Strengthen India’s Global Competitiveness

To sustain growth, MRAI seeks a “progressive and balanced policy framework” centered on recycling-led expansion. Specifically, the group proposes cutting the 2.5% import duty on aluminum scrap to zero. Such a move, MRAI says, would secure feedstock supply for recycling plants and ensure uninterrupted secondary aluminum production.

Additionally, MRAI calls for a reduction in the Goods and Services Tax (GST) on aluminum scrap from 18% to 5% or less. Lowering this tax would ease liquidity challenges, encourage industry formalization, and enhance competitiveness throughout India’s aluminum value chain. Simplifying GST and tax deducted at source (TDS) systems, the group adds, would empower small and medium recyclers to invest, expand, and create more green jobs.

These tax reforms, MRAI believes, are essential for India to maintain leadership in global circular manufacturing. As markets increasingly favor sustainable and traceable metal sources, India’s recycling sector could emerge as a model for low-carbon industrialization.

SuperMetalPrice Commentary:

The MRAI’s proposal for aluminum recycling tax breaks underscores a broader global shift toward green industrial policy. As nations race to decarbonize manufacturing, India’s secondary aluminum industry could capture new export opportunities—especially in the EU and Asia-Pacific. A reduced tax burden would not only improve competitiveness but also stabilize raw material supply amid fluctuating global scrap markets. If enacted, these policy changes could mark a pivotal moment in India’s transition to a circular, resource-efficient economy.