In a move that will virtually stop steel imports into the country, the government has issued a notification that all imported steel products should conform to the quality specifications laid down by the Bureau of Indian Standards (BIS). The standards will also be applicable to domestic steel manufacturers.
The country imports about 11 per cent of its annual steel consumption of 55 million tonnes, most of it from China, Japan and Korea. Secondary steel producers, who rely heavily on imported steel, will also be hit.
The Steel and Steel Products (Quality Control) Second Order, 2008, is supposed to be operational from February 12. It was first scheduled to come into effect from September 12, 2008. The order requires all domestic steel producers as well as international companies selling steel to India to register with the BIS. Secondary steep producers have urged the government to delay the implementation of the order.
“Sub-standard or defective steel and steel products shall be disposed of as scrap,” the order says. But steel exports from India have been exempted.
“The order is very much there but the ministry is discussing if it should be implemented from the stipulated date or not. It has been postponed once. There is a request from secondary steel producers to postpone the implementation further,” said Steel Secretary PK Rastogi. He said the order was also applicable to steel imports.
The Cold Rolled Steel Manufacturers Association (CORSMA) has asked the ministry to introduce quality standards based on the application of steel. “Foreign suppliers are not keen to get BIS registration and might stop exports to India.
The Japan Chamber of Commerce and Industry has written to the commerce ministry against the proposed standards since they amount to technical barrier under the WTO norms,” said SC Mathur, executive director, CORSMA. Mathur added the order would benefit a few major domestic producers who face competition from cheap steel imports.
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Sources in the secondary steel industry said the order amounted to a backdoor ban on steel imports and forcing them to depend entirely on domestic producers.
“The grade of steel required for the automobile industry is not the same as the quality of steel needed to produce a trunk. So introducing uniform quality specifications is not practical,” said a secondary steel producer.