As of the most recent reliable data, the Indian aluminum market was valued at approximately USD 5.99 billion in 2021. India’s total aluminum production capacity stands at about 4.1 million tonnes per annum (MTPA) as of 2022, with actual production reaching approximately 3.97 million tonnes in the fiscal year 2021-2022.
Domestic consumption of aluminum was around 3.7 million tonnes during the same period, reflecting a robust internal demand.
The Indian aluminum market is expected to grow at a compound annual growth rate (CAGR) of 6.5% from 2022 to 2027.
This growth is driven by increased consumption in various sectors such as power, automotive, construction, consumer durables, and packaging. India accounts for approximately 5.6% of the global aluminum production, underscoring its significant role in the global market.
Key Players in Aluminum Industry in India
The Indian aluminum industry is dominated by three major players:
- Hindalco Industries: ~35% market share
- Vedanta Aluminium: ~32% market share
- National Aluminium Company (NALCO): ~14% market share
The remaining 19% of the market is occupied by smaller players.
Segment-wise Break-up
The market is divided into primary aluminum, which constitutes about 60% of the market, and secondary aluminum (recycled), which makes up the remaining 40%.
End-use Sector Distribution
The distribution of aluminum consumption across various sectors is as follows:
- Power Sector: ~48%
- Automotive & Transportation: ~15%
- Construction: ~13%
- Consumer Durables: ~7%
- Packaging: ~6%
- Others: ~11%
Export Value
India’s aluminum exports were valued at USD 5.1 billion in the fiscal year 2021-2022. The export sector is expected to grow at a CAGR of 8-10% over the next five years, with projected export values reaching USD 7.5-8.0 billion by 2025-26.
Future Growth Projections for India’s Aluminum Industry
Overall Market Growth
The Indian aluminum market is projected to grow at a CAGR of 6.5-7.5% between 2022 and 2027. By 2025-26, the production capacity is expected to increase from the current 4.1 MTPA to 4.5-5.0 MTPA. Domestic demand is forecasted to reach 5.5-6.0 million tonnes by 2025-26, representing an annual growth rate of 7-8%.
Per Capita Consumption
Per capita consumption of aluminum in India is expected to increase from the current 2.5 kg (2022) to 4.0-4.5 kg by 2025-26.
Sector-wise Growth Projections
- Automotive: Expected to grow at a 10-12% CAGR through 2025, driven by the increased use of aluminum in vehicle light-weighting.
- Construction: Projected to grow at 8-9% annually, boosted by government infrastructure projects and green building initiatives.
- Packaging: Anticipated to grow at a 9-10% CAGR, fueled by rising demand for sustainable packaging solutions.
- Electrical: Expected to grow at 7-8% annually, driven by power sector expansion and renewable energy projects.
Recycling Sector
The secondary aluminum (recycling) market is projected to grow at an 11-12% CAGR through 2025, expected to reach 2.0-2.2 million tonnes by 2025-26.
Investment Projections
The aluminum industry is expected to attract investments of USD 5-6 billion over the next five years, focused on capacity expansion, technology upgrades, and sustainability initiatives.
Government Initiatives Impact
Government programs such as “Make in India” and the National Mineral Policy are expected to boost domestic production, potentially increasing the industry’s contribution to GDP from the current 2% to 3-3.5% by 2025-26.
Technological Advancements
The implementation of Industry 4.0 technologies is expected to improve productivity by 15-20% by 2025. Additionally, a focus on green aluminum production could open new export markets.
Challenges to Growth
Despite the optimistic projections, the aluminum industry in India faces challenges such as high energy costs, which could impact growth by 1-2% annually. Furthermore, global market fluctuations and competition from imports may affect growth projections.
Conclusion
The aluminum industry in India is poised for significant growth in the coming years, driven by robust domestic demand, strategic investments, and supportive government initiatives. However, addressing challenges such as energy costs and global competition will be crucial for sustaining this growth trajectory.