World Aluminium Market reported that India's aluminum exports could rise 5% in the current fiscal year to 325,000 tons despite a slowdown in global demand as falling prices have led rival global producers to cut production.

Declining aluminum prices have forced major players such as Alcoa and Norsk Hydro to cut output and have prompted China, the world's largest consumer of the metal and Japan to ramp up purchases.

Mr Mukesh Kumar president of Vedanta Aluminum Limited said that "Due to the sudden closure of some of the smelters in the USA, the export demand has slightly improved."

Vedanta Aluminum, a part of billionaire Mr Anil Agarwal controlled Vedanta Group produces about 40% of the South Asian nation's total output. India exported 310,000 tons of aluminum in 2011 to 2012.

Aluminum prices have fallen this year alongside other metals as the global economy has cooled. The benchmark 3 month LME aluminum contract on Friday, at USD 1,846.25 per ton was down 22% from its year high in March.

Traders said that Indian aluminum exports to South Korea, Japan and China are currently priced at a premium of USD 223 per ton to USD 230 per ton above the LME benchmark, lower than the USD 240 to USD 260 premium from other countries.

Low costs and availability of better grades of inputs such as bauxite give Indian smelters an edge over other suppliers but bureaucratic and environmental delays have limited the availability of coal, a major fuel for aluminum production.

India produces around 1.6 million tons of aluminum and consumes about 1.3 million tons annually. Its domestic demand is poised to grow by 7 to 8 percent a year, led by its power transmission, construction and automobile sectors.