Vedanta Aluminium CEO calls for retaliatory tariff as duty concerns weigh heavy

US levies a 50 percent import duty on Indian aluminium

Vedanta Aluminium chief executive officer Rajiv Kumar has called for tariff parity, as India and the US try to thrash out a trade deal, saying New Delhi’s aluminium trade deficit with Washington has more than doubled over the past five years.

In an interview to Moneycontrol, Kumar stressed the need for “urgent corrective measures", failing which India should consider reciprocal tariffs on American aluminium products.

He also shared details of an in-house process the company has developed to recover graphite, which finds extensive use in EVs and batteries, from spent pot lining (SPL) waste, a hazardous material generated during the aluminium smelting process, the company's Rs 1 lakh crore investment plan for Odisha and more.  Edited excerpts of the interview:

The US continues to impose steep tariffs on aluminium imports. What is the impact on Indian producers?

The US levies a 50 percent import duty on Indian aluminium under Section 232, which came into effect on June 4. This has significantly undermined Indian exporters’ competitiveness. Despite importing over $27 billion worth of aluminium, the US continues to maintain these high tariffs, placing Indian producers at a disadvantage.

India’s aluminium trade deficit with the US has more than doubled – from 90 kilo tonnes (KT) in FY20 to 210 KT in FY25. This calls for urgent corrective measures. The sector’s expectation is clear — a complete exemption from Section 232 tariffs. Failing that, India must consider reciprocal tariffs on US aluminium products, including scrap, to protect its domestic industry, just like the US has done to shield its own.

Vedanta Aluminium recently unveiled a new graphite recovery process. What is the scale and significance of this innovation?

At our Jharsuguda smelter, we’ve developed a proprietary technology to recover 40-45 percent battery-grade graphite from spent pot lining (SPL) waste. The plant generates about 1,250 metric tonnes of SPL monthly, offering substantial potential for domestic graphite production.

With India currently importing over 70 percent of its graphite needs, mainly from China, this technology can reduce import dependence and build local supply-chains for key sectors like batteries, EVs and renewable energy. In 2024 alone, India imported $41 million worth of natural graphite.

Is the industry seeking policy support for graphite like for other critical minerals?

Yes. We’ve sought a dedicated graphite policy and for graphite to be included in the production linked incentive (PLI) scheme. With China controlling about 80 percent of global graphite processing, India’s dependence poses strategic and economic risks.

A robust policy should include incentives for domestic exploration and processing, regulatory streamlining and strategic reserves. A focused PLI scheme would encourage recycling and innovation, enabling long-term self-sufficiency and energy security.

How does Vedanta plan to scale its graphite technology and integrate it into commercial application?

We are in active discussions with partners to scale up deployment. Preliminary tests have confirmed the graphite’s suitability for various industrial uses. We have now entered the certification and qualification phase, with EV (electric vehciles) and battery manufacturers. Our aim is to become a reliable domestic supplier for India’s fast-growing lithium-ion battery ecosystem.

What are Vedanta Aluminium’s growth plans and capex target for FY26?

In FY25, Vedanta Aluminium produced 2.42 million tonnes, more than half of India’s total aluminium output. For FY26, we’ve earmarked a capex of $1.7 billion, of which $700 million is allocated to our aluminium and power businesses. We aim to grow our share of value-added products from 60 percent to 90 percent.

There’s mention of a Rs 1 lakh crore investment plan in Odisha. What does it entail?

We’re investing Rs 1 lakh crore in Odisha, which includes establishing a 3 MTPA green aluminium smelter, a 6 MTPA alumina refinery and a 253-acre Aluminium Park in Jharsuguda, which will be India’s largest metals park.

This infrastructure will support sunrise sectors such as EVs, solar, electronics, and construction while enabling MSMEs to source hot metal directly, improving supply- chain efficiency and driving downstream manufacturing.

How are you addressing sustainability and decarbonisation?

We’re at the forefront with our low-carbon aluminium offerings made using renewable energy and recycled materials. We’ve also deployed technologies that reduce energy usage by 200–250 kWh per tonne of aluminium.

Other initiatives include use of biomass briquettes and natural gas and sourcing 105 MW of hybrid renewable power. We are aiming for net-zero carbon emissions by 2050 or earlier.

How is Vedanta aligning with India’s EV, renewable and electronics push?

We are expanding our portfolio of advanced aluminium alloys and billets designed for applications such as automotive wheels, EV battery casings, HVAC (heating, ventilation, and air conditioning) systems and solar structures — all vital for the green economy transition.

How do you plan to fund the next phase of growth – internal accruals, asset monetisation or raising capital?

Our next phase of growth — covering smelting, refining, and mining — will be funded by a mix of internal accruals, asset monetisation, and capital raising. Of the group’s $20-billion expansion (plan) for the next three-four years, about half will be financed through internal cash flows. The remaining will come via equity partnerships and debt to maintain a healthy leverage profile.

Additionally, the proposed demerger will unlock value and allow targeted capital raising for the aluminium business. We’re also aiming to reduce debt by $3.5 billion by 2027 and target zero net debt within the next 3-4 years.