India’s ministry of steel has widened import restrictions on steel and steel related products triggering widespread fears of supply-chain disruptions, financial loss and even plant shut-downs, SteelOrbis learned from government officials and industry circles on Wednesday, June 18.
Officials said that the ministry of steel has issued new rules under which not just finished steel or semis but even raw or intermediate materials related to steelmaking manufactured overseas and imported into the country would have to adhere to mandatory quality control order (QCOs) and specifications laid down by Bureau of Indian Standards (BIS).
The rule has been put into effect for bills of lading dated June 16 onwards, leaving businesses with effectively no working day to comply with the new regulation.
It is pointed out that under mandatory QCOs, all steel and steel related raw materials imported into the country would need quality certification from BIS. The BIS issues such certifications to an importer only after completing a physical verification of the plants abroad from which such imports are being sourced and typically required 6-9 months to secure such a certificate.
"The rule has triggered fears of massive losses and plant closures among micro, small and medium enterprises (MSMEs) that rely on imported semi-finished steel. Many have already paid for shipments now deemed non-compliant," the Global Trade Research Initiative (GTRI), an independent think-tank said in a report.
It said that importers now risk seeing their shipments declared non-compliant, even if contracts were signed months ago and goods are already in transit.
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, it added.
