Steel sector expects pain as government gives less than one day to comply with quality order
A new notification by the Ministry of Steel on quality certifications for steel inputs has given industry players less than one business day to comply with it and stands to create huge disruptions and cost escalations for Micro, Small, and Medium Enterprises (MSMEs) in the sector, according to steel industry participants and trade experts.
The notification — released on June 13 — extended the Ministry of Steel's Quality Control Order (QCO) on steel and steel products to the inputs that go into the making of these products too. This means that the input and raw materials used to make steel and steel products, including imports, will also have to conform to the relevant standards issued by Bureau of Indian Standards.
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For example, if a company in Malaysia supplies steel slabs to a Vietnamese company, which in turn processes them into sheets and exports those to India, both the Malaysian as well as Vietnamese firms will now need to be BIS-compliant.
According to Panckaj N. Umrania, Executive Director at KND Steel, this requirement will not only increase the compliance burden, but will also increase costs for steel importers.
'What will happen in the industry is that a lot of manufacturers will struggle to import now,' Mr. Umrania told The Hindu. 'So, their production will be hampered, their customers will be hampered, delays will occur. So, a lot of disruption, I personally see, is going to happen.'
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'There is also no support available as such from the government,' he added. 'So, you have to run pillar to pillar (to obtain the paperwork). And, of course, there is a lot of cost also in order to get these things done.'
He added that, once the Indian importers start asking for documentation and certifications from their sellers abroad, then these sellers will increase the price of their supplies.
'It's a problem for importers, especially those who are importing semi-finished goods,' Pankaj Chaddha, chairman of the Engineering Exports Promotion Council of India said. 'It will impact the MSME importers in a big way.'
Apart from the compliance burden itself, the problem with the latest notification is that it has not provided enough time to businesses to comply. According to the notification, it would be effective for all steel imports that have a bill of lading dated on or after June 16, 2025.
'Effectively, Indian importers were not given even one working day — between the order's date being June 13, 2025 (Friday) and announcement date (over mail and SIMS portal) on June 16 (Monday) — to ensure full compliance,' Ajay Srivastava, former Director General of Foreign Trade and founder of the Global Trade Research Initiative (GTRI) said.
According to Mr. Umrania, even a month's notice would not have been enough time, since processes related to the steel industry take a long time.
'So, just giving a notification on the 13th and saying that we will start applying the rules and regulations starting from 16th is definitely not enough time,' he said.
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