Globally, every nation is recalibrating the industrial strategy i.e. decarbonisation, green energy, circular economy and strategic critical metals to meet their economic and climate commitments. The critical metal strategy redefines the low carbon or green metal transition and national security. Aluminium is quietly emerging as one of the most critical low-carbon enabler due to its unique sustainability-dividends i.e. raw-material availability, lightweight and infinite recyclability. Such characteristics make it the backbone of energy resilient future technologies. As per International Aluminium Institute report on greenhouse gas pathways to 2050, countries treating aluminium as strategic resource to lead the next wave of renewable energy expansion and low-carbon mobility.

Several major economies including US, European Union (EU), and UK, have listed aluminium (or its key precursor, bauxite) under critical metal category and strengthening domestic protection frameworks (EU’s Carbon Border Adjustment Mechanism, the US’s 50 per cent tariff under Section 232) to secure long-term supply due to its vital role in green energy and defence etc. Yet, Indian aluminium story remains under-leveraged. India’s growth story amplifies this urgency.

Not keeping with strategic importance

As a fourth largest economy with Panchamrit (five nectar elements) 2030 climate commitments and a vision of a $30 trillion economy by 2047, a strong critical metal framework is needed. The country is emerging as global business powerhouse in terms of sustainable production and consumption with strong skilled workforce and the largest customer base. To address the green product (i.e. solar technologies, EV platforms, defence and infrastructure) demands, the requirement of aluminium is projected to increase six-fold by 2047. Yet, the National Critical Mineral Mission (NCMN) governing the critical mineral sector has not included aluminium or bauxite in the list to keep the pace with its strategic importance, while countries are taking protectionist stance and citing “national security” to restrict imports.

Despite abundant bauxite reserves (6th largest in the world) and globally efficient local producers, India is increasingly dependent on imports, especially low-grade scrap. Imports continue to surge, sub-standard scrap enters the supply chain without appropriate regulation results domestic capacity expansions are facing headwinds from global dumping and tariff disparities. Unregulated scrap inflows adversely affecting the recycling ecosystem, raising processing emissions, and compromising material reliability for upcycled green technologies. These structural challenges are increasing the economic concerns and undermine India’s green transition, circularity ambitions, and long-term industrial resilience.

Making framework advantageous

Strengthening the National Circular Economy Framework by developing a robust scrap collection system and domestic recycling capacity is vital for India. It will reduce emissions, conserve resources, and ensure environmental safeguards, thereby making the nation self-reliant. Such efforts will make the NCE framework advantageous for aluminium under threat from an influx of contaminated and low-grade scrap, without firm quality controls. At the cusp of strategic CE transformation, the country urgently needs to develop strict BIS scrap-quality standards in line with global standards to ensure only high-grade environmentally compliant material enters in our recycling ecosystem.

In addition, the country may impose a reasonable Customs Duty (nearly 15 per cent) on all aluminium imports (including aluminium scrap) in line with other countries, such as the EU’s Carbon Border Adjustment Mechanism (CBAM), the US tariff (Section 232) as a protectionist approach to prevent dumping from global markets. Such actions will strengthen domestic market and attract nearly ₹20 lakh crore in new domestic investments across green smelting, recycling, value-added manufacturing and re-manufacturing.

Transforming resources into value

A robust domestic aluminium ecosystem will reposition aluminium more than a metal; it will deliver resilience against geopolitical supply shocks and mobility projects. It will create strong circular economy market of $2 trillion with ten million job opportunities in country by 2050. It will also transform India’s abundant resources into long-term economic and environmental value rather than ceding ground to foreign producers with weaker sustainability standards.

India stands at a decisive juncture. The choices made today will determine whether aluminium emerges as a cornerstone of the nation’s next industrial transformation or becomes a missed opportunity, diluted by unchecked imports and environmental compromise. A forward-looking policy anchored in domestic self-reliance and sustainability can ensure that aluminium fuels not only infrastructure growth, but also a more equitable, resilient, and future-ready India.

The author is Assistant Professor, School of Management, NIT Rourkela

Published on January 11, 2026