Govt set to tighten quality norms amid rising substandard steel imports

The Centre is preparing to expand its steel quality control norms following a review that revealed an increase in substandard imports, primarily from China, threatening local industry

The Centre is considering broadening its strict quality standards in response to the rising influx of substandard steel, primarily originating from China, according to government sources, as mentioned by The Economic Times report.

This decision follows an in-depth review conducted by the Ministry of Steel in early October, which revealed growing concerns about the sector's exposure to trade diversions on a global scale.

During the first five months of the current financial year, India became a net importer of steel. According to official data, the country imported 3.45 million tonnes (mt) of steel, compared to 1.92 mt of exports, the report said.

 

The increase in imports is driven by global producers seeking new markets due to weak demand and high tariffs imposed by the US and the EU. These conditions have heightened the risk of steel dumping into India, according to the report.

Strengthening quality control measures

The government’s tightening of quality checks is seen as a way to curb the flood of steel imports. Currently, various grades of steel are permitted for import, subject to a no-objection certificate (NOC) from the steel ministry, despite existing quality control orders (QCOs).

However, officials, as mentioned by the report, have said that going forward, NOCs will only be issued for steel grades not manufactured locally. This move is expected to address the import of steel that doesn’t comply with the Bureau of Indian Standards (BIS).

The steel ministry has issued norms for 1,279 steel grades under 151 QCOs, but as many as 1,127 grades have been allowed to enter the country with NOCs. Officials have indicated that this loophole will soon be addressed, with the expansion of QCOs to cover a wider range of steel grades, the report further said.

India imports approximately 400,000 tonnes of non-BIS-compliant steel annually, valued at around Rs 4,200 crore. In a bid to curb the entry of substandard steel, the government had already mandated in October last year that any steel import not approved by BIS must first receive clearance from the steel ministry.

Stakeholder consultations

As part of the review process, the Ministry of Steel has engaged with industry stakeholders, particularly in light of growing concerns over increasing steel imports from China and Southeast Asian countries.

Other countries have also taken steps to protect their steel industries. The US and Canada, for example, have imposed a 25 per cent safeguard duty, while the European Union has applied the same duty beyond a set quota. Countries like Turkey, Indonesia, Malaysia, Vietnam, and Japan have also introduced protective measures.

Last month, the government launched an antidumping investigation into imports of cold-rolled non-oriented electrical steel from China. The move was prompted by complaints from South Korean and Taiwanese steelmakers operating through their subsidiaries in India. This investigation forms part of the broader efforts to safeguard the domestic steel industry against unfair trade practices.