India’s midstream and downstream aluminium industry is coming under mounting pressure as disruptions linked to the West Asia conflict filter through domestic manufacturing, raising input costs, straining supply chains and tightening liquidity. Industry body Aluminium Extrusion Manufacturers Association of India (Alemai) has warned that the combined impact is pushing the sector, particularly the extrusion segment, into a period of acute stress.
Speaking to BW Businessworld on the sidelines of Alemai's ‘Aluminium Bharat’ unveiling in New Delhi, Jitendra Chopra, President of Alemai, said the sector has been forced to scale down production sharply, with output falling to nearly half of normal levels. “We are not untouched by the crisis,” Chopra said. “Every industry has been affected, but in our case, the impact is severe. Supply chains are broken, energy availability is uncertain, and raw material costs have risen sharply. At present, we are operating at only 50 to 60 per cent capacity," he added.
MSMEs Under Pressure
The brunt of the crisis is being borne by micro, small and medium enterprises, which form the backbone of the downstream aluminium segment. Chopra pointed to a sharp rise in input costs, estimated at 25 to 30 per cent, alongside a growing shortage of working capital. “If the price of a product rises from 100 to 140, consumption will not sustain,” he said. “That is the reality we are facing.”
Demand has weakened across key sectors such as construction, automobiles and renewable energy, limiting the ability of firms to pass on higher costs. This has led to pressure on margins and growing financial stress, particularly among smaller units servicing loans.
Chopra said Alemai has urged the government to step in with relief measures, including a temporary moratorium on interest repayments and support for working capital, similar to steps taken during the Covid-19 period. “Working capital support is essential,” he said. “Without it, MSMEs will struggle to survive this phase. Even when the conflict ends, supply chains will take time to stabilise. Recovery will not be immediate.”
Policy & Structural Gaps
Beyond immediate concerns, the industry is also seeking longer-term policy interventions. Alemai has called for stricter enforcement of Bureau of Indian Standards norms to ensure quality and bring greater uniformity to what has historically been a fragmented sector.
Chopra also highlighted the need to promote value-added manufacturing to strengthen the domestic industry and improve export prospects. “This industry supports a wide network, from glass and rubber to fittings and coatings, with significant employment potential,” he said.
Drawing a comparison with China, Chopra argued that India must take a more strategic approach to its aluminium policy. He noted that China had long restricted the export of raw materials, focusing instead on value-added products. “We are among the largest producers of aluminium, yet we import expensive raw material,” he said. “This needs policy attention.”
Managing Through The Downturn
Despite a 40 to 50 per cent production decline across segments, the industry has so far avoided large-scale job losses. Companies have attempted to retain workers, even as operational challenges persist due to rising fuel costs and supply disruptions. “We have tried to stand by our labour,” Chopra said. “Production has declined, but we have not let people go in large numbers.”
Even so, the sector remains under considerable stress. Chopra underlined that timely policy support will be critical to stabilise operations and prevent deeper disruption in a value chain that supports over a million jobs and underpins several key sectors of the economy. |
