India govt becomes stricter on steel imports, clarifies on previous quality control order

In what is being seen as a non-tax barrier to discourage imports, the Ministry of Steel has issued a clarificatory circular on a previous one issued in 2018.

As per the latest circular issued on 26 October all steel importers importing steel without BIS licence must mandatorily apply and seek clarification from the Ministry of Steel through the QCO portal for each and every imported steel consignment.

Steel ministry sources informed SteelMint that quality control orders (QCOs) are issued intermittently whenever the need arises. Whenever the ministry needs to add a new grade, the QCO gets updated. However, the 2018 circular led to a scenario where, the ministry source informed, a lot of imports were coming into the country circumventing the QCO, as gathered from industry submissions.

"So, the latest circular informs that all consignments coming in without BIS certification will have to approach the ministry for clarification as to whether these are allowed to come in or not," the source said.

Another top-level industry source said what was happening so far was that importers were taking one clarification and going to Customs and getting multiple consignments cleared. "So we are saying that one clarification is for only one mill test certificate," the official informed.

Earlier, there could be an understanding that with one particular invoice and test, the importing party could import again and again. The ministry is clarifying that, no, each time the technical committee sits and clarifies that one test applies to only one consignment.

"May be, one test has been used multiple times but we do not want it to be used multiple times. This is because BIS keeps upgrading and changing its QCOs. What applied in 2022 may not apply in 2023," one source informed.

Asked if the QCO is a means to serve the dual purpose of stopping influx of sub-standard material into India and also give protection to the domestic steel industry, ministry sources declined to comment, saying, "There is a difference between HNS codes and QCOs. Some IS codes are covered in QCOs and some are not. So, when an import is coming in, whether it is covered by a QCO or not, Customs needs to know that."

As per the latest 26 October circular, the QCO mandates that all the steel products imported into India must have BIS licence/certification and be accompanied by a "mill test certificate" and be marked with ISI and BIS licence numbers.

These licences/certifications apply to the importing party and not the party exporting to India.

For smooth implementation of the QCO, the Ministry of Steel has constituted a Technical Committee (w.e.f. October 2018) for examination and analysis of the application(s) received for issuance of clarification, whether the product(s) being imported without BIS certification are covered under the steel QCO or not. For issuing the said clarification to importers, the Ministry of Steel has launched a dedicated portal, TCQCO Portal (https://tc-qco.steel.gov.in/tc-qco) w.e.f. August 2020.

The ministry issues clarification for each single consignment and the importer needs to submit fresh application through the portal unless stated in the clarification issued.

Sources hinted that one more QCO is on the anvil, which may cover more flat products.

India's steel imports

India's steel imports rose over 23% in April-September, 2023 to 2.80 mnt against 2.27 mnt seen in the same period last fiscal (FY23).

Imports of HRC/plates rose a significant 71% to 1.11 mnt in this period (0.65 mnt).