Given that India has been a global talking point for its superior economic performance and growth, it is necessary to examine whether our sector is feeling this euphoria as much as the country as a whole. So while India is likely to close its financial year with a tad under 7% growth, business conditions in our sector have not really followed this number. One of the big reasons for this is excess capacity that got built in a very short period of time. The global bounce-back after COVID brought such a demand frenzy that industry went into overdrive, ramping up production and capacities.
In secondary aluminium (die-casting ingots), nearly 30% of our production found export markets in 2021/22. But that changed very quickly as the negative effects of the Ukraine conflict and chatter about recession started seeping through. Also, China’s reopening and the streamlining of its own production lines took the wind out of the sails of India’s secondary producers.
I write these words in late January, just ahead of the presentation of India’s annual budget on February 1. Given the superlative performance of its broader economy, the finance minister and her team will no doubt be exuding confidence and extra gleam on that day. The ability of the incumbent government to pull off major reforms over the last two terms and to continue spending on big infra projects has been widely applauded. A cut in direct and indirect taxes would perhaps be most pleasing to the Indian public and it could also lay the groundwork for upcoming general elections in 2024.
But the X-factor in this budget would be the government showing its clear intentions in walking the talk on sustainability. India’s goal of a net-zero-emission economy by 2070 requires moving from a linear to a circular economy, but a sectoral approach in the absence of an overarching national policy could make the process less efficient. Nearly a dozen areas have been identified - including metals - that could spearhead the circularity agenda. But a true transition would require products to be designed and manufactured in a way to facilitate reuse, remanufacturing, recycling or recovery. Perhaps not yet ready for such a bold move, the budget may still provide fiscal incentives for each sector to make its plans effective. It has been four years since the release of the National Resource Efficiency Policy and there has been no action. With its implementation, we hope that recycling will shine as much as India.