India, Aug. 1 -- Import parity pricing of primary metal raises raw material costs for entrepreneurs in the domestic downstream aluminium sector, squeezing their margins and hurting manufacturing competitiveness, according to a report.

Despite being the world's second-largest producer of primary aluminium with an installed capacity of over 4.16 million tonnes annually, the country's nearly 3,500 downstream and secondary aluminium units - mostly micro, small and medium enterprises (MSMEs) - face significant structural disadvantages, said the report by public policy think tank Policy Consensus Centre.

The report said these enterprises provide almost 90 per cent of employment across the aluminium value chain and supply critical inputs to se...