Steel min order on standards could hurt MSMEs; fear of losses, plant shutdowns: GTRI
A recent steel ministry order mandating BIS standards for imported semi-finished steel and their raw materials is causing concern among MSMEs. Effective June 16, the rule threatens losses and plant shutdowns as many businesses have shipments en route that may not comply.
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The steel ministry 's latest order on sectoral standards could hurt MSMEs dependent on semi-finished imports, as they now fear heavy losses and potential plant shutdowns, think tank GTRI said on Tuesday.It said that the steel ministry's June 13 order has expanded India's quality control regime to ensure that not just BIS (Bureau of Indian Standards) licensed products are imported in the country, but also the input/raw materials used to make them conform to the relevant Indian standards issued by BIS.The order came into applies to shipments with a bill of lading dated June 16 onward."The rule has triggered fears of massive losses and plant closures among MSMEs that rely on imported semi-finished steel . Many have already paid for shipments now deemed non-compliant," the Global Trade Research Initiative (GTRI) said.As per the order, not only should finished/semi-finished steel products comply with Indian Standards (IS), but also the raw materials or inputs used to make them.This change applies to all steel and steel products covered under Quality Control Orders (QCOs). Importers have to ensure that input materials such as slabs, billets, or hot-rolled coils that are used to make BIS-certified steel in the foreign factory also need to adhere to the relevant BIS standard."India's sudden expansion of its steel import rules has sparked fears of major losses among small manufacturers. Industry groups say the new order gives businesses no time to comply," GTRI Founder Ajay Srivastava said.He added that importers now risk seeing their shipments declared non-compliant, even if contracts were signed months ago and goods are already in transit.Srivastava said that critics, too, have questioned the feasibility and need for this compliance.BIS certification for upstream suppliers can take six to nine months, yet the Ministry has enforced the new traceability requirement with only three days' notice and no stakeholder consultation, he added.
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