India Extends Deadline on Auto-grade Steel Import Rules till Apr'19

According to the latest reports, India has extended a compliance deadline by another two months on tougher import rules for some grades of steel that are used in the auto sector. Compliance for the new rules that had been earlier set for 17 Feb'19 have been extended till 17 Apr'19.

The grades of steel that have received the deadline are (all the grades of) steel available in Indian Standards IS: 4454 (Part I): 2001, IS: 4454 (Part II): 2001, IS: 1169 (Part I): 1984 & IS: 6603: 2001, IS 6527: 1995 & IS 6528: 1995.

Notification from Steel Ministry

The background in the past

In August 2018, the steel ministry had announced stringent import rules for some high-grade steel products that are sourced by carmakers from countries such as Japan and South Korea but not yet manufactured in India. Later on, the steel ministry granted a two-month exemption (till Feb'19) to carmakers on new quality control rules for imports which were originally due to come into effect on Dec'18. Now this deadline extension till Apr'19 is a second-time extension by the ministry.

The stricter compliance rules are aimed at discouraging automakers to reduce their dependence on steel imports and make them use locally made alloy. Also, it is an attempt by the domestic steel ministry to restrict the rising steel imports. India remained a net importer of steel during April-November 2018 after exports dropped over 30%.

However, industry experts from the auto sector are of the opinion that the compliance to the regulations would stall the production for India's auto industry because carmakers in India continue to rely on imports as local steel companies do not manufacture the grades they need. Another risk involved according to them is that if the import of steel (raw material) is restricted into the country, then the industry may go for import of the components itself which may affect the government initiative of 'Make in India'.

For example, an Asian carmaker which failed to source stainless steel exhaust pipes locally has instead decided to import the entire fuel exhaust system as cited by Deputy Director General at the Society of Indian Automobile Manufacturers (SIAM) in an interview.
India's auto manufacturing sector is mainly dominated by Maruti Suzuki, Hyundai Motor Co, Honda Motor Co, and Ford Motor Co. Automakers wanted this deadline to be extended by the end of 2019.