Govt issues clarification on Quality Control Order for steel products

New Delhi, July 2 (IANS) The Ministry of Steel clarified on Wednesday that it has issued Quality Control Orders for the enforcement of 151 BIS Standards. The last Quality Control Order was issued in August 2024, and no new Quality Control Order has been issued since then.

The ministry made it clear that its order dated June 13 is merely to clarify that in the case of intermediate material for manufacturing of final products under BIS Standards, steel products will also have to follow BIS Standards prescribed for such intermediate products.

The Ministry made it clear that no new Quality Control Orders have been issued, and the order on June 13 was necessary to bring parity between importers and domestic producers of steel. Presently, the import of finished steel products is not at par with Indian manufacturers of finished steel products, as Indian steel products manufacturers have to use only BIS Standard-compliant intermediate material, while no such requirement was felt by importers for the import of steel products. It will be wrong to put domestic steel products manufacturers at a comparative disadvantage vis-à-vis imported products in terms of non-BIS-compliant intermediate input products.

The order will also help to ensure compliance with BIS Standards for intermediate products is required to ensure that the finished product is as per the quality requirement given by BIS Standards. If this is not done, a final product may be sub-standard. For example, a large quantity of coated steel is imported into India. Coated steel uses HR/CR Coil as base material, which is the main product in this case. If HR/CR Coil is not BIS compliant, coated steel cannot be BIS compliant, even if the coating process is itself BIS compliant, according to the statement.

Besides, the order is also aimed at checking the possibility of the import of substandard steel. Because of excess capacity and declining consumption in certain countries, there is a big possibility of the dumping of substandard steel. As India is the only fast-growing large economy in the world, there is a very high possibility of cheap steel getting pushed into the Indian market unless adequate measures are put in place for the import of quality steel. It is to be noted that if intermediate inputs (which form the core of finished products like HR coil, CR coil or coated steel) are not BIS compliant and are substandard, the final product cannot be BIS compliant, the Ministry’s statement said.

The statement further highlighted that Integrated Steel Plants, which make intermediate products and finished products themselves, and the BIS licence has been issued to them, taking into account the whole process, will not need to have different licences for all stages, as the BIS certification process takes care of the whole manufacturing chain. The Ministry of Steel will issue clarifications in this regard after verification from BIS for such integrated steel plants.

It further states that apprehension of the possibility of a price rise due to the June 13 order issued by the Ministry of Steel is unfounded. India has a steel manufacturing capacity of 200 million tonnes, which is enough to meet domestic demand. Hence, no such possibility of price increase seems to be there.

The Ministry’s statement also pointed out that many countries have imposed safeguard duties and measures to prevent the import of cheap steel from the international market, such imposition of sectoral tariffs, Tariff Rate Quotas (TRQs), etc. Because of these safeguard measures adopted by other countries, the possibility of dumping of cheap substandard steel into India further increases. If this happens, this will have an extreme adverse impact on the domestic steel industry and especially the small steel industries in the country. This will also lead to the possibility of the loss of employment of lakhs of people.

India is the only major economy where steel consumption has grown at above 12 per cent for the last three years. On the contrary, the steel consumption in other geographies is either stagnant or declining. This fast growth in steel consumption is due to the Indian government’s push on infrastructure strengthening, public and private sector development in buildings and real estate and growing manufacturing of capital goods in the country. To cater to this steel demand, the country will need about 300 MT steel capacity by 2030 and 400 MT of steel capacity by 2035. This capacity creation will require a capital infusion of approximately $200 billion by 2035.

If substandard cheap steel imports affect the domestic steel industry (both integrated steel producers and small steel industries), their capacity to infuse this capital will come into terrible strain, and the capacity expansion plans of the steel industry will be adversely affected, the statement added.

--IANS

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