India: Govt renews BIS licence of Vietnam's Formosa Ha Tinh

In a significant recent development, the government has renewed the Bureau of Indian Standards (BIS) licence of Vietnam's steel major Formosa Ha Tinh.

The BIS seeks to ensure that the domestic market is not flooded with substandard steel imports.

The Ministry of Steel issued a clarificatory circular on 26 October'23 stating that all steel importers without a BIS licence must mandatorily apply and seek clarification from the Ministry of Steel through the QCO portal for each and every consignment. As per the 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.

Steel imports surge

Indian steel imports rose sharply in FY'24 - India's steel imports have been grabbing considerable attention for the past one year or so because of their ensuing negative impact on domestic sales.

Imports showed a healthy 34% increase to 9.33 million tonnes (mnt) in FY'24 against 6.94 mnt in FY'23, data reveals. Steel imports, it may be recalled, had hit a seven-year high in CY'23. South Korea, China and Japan were the top three exporting countries in FY'24.

South Korea was the largest importing country for India, with volumes rising 11% to 2.75 mnt compared to 2.49 mnt in FY'23. China's imports stood at 2.50 mnt (1.55 mnt), showing a significant y-o-y rise of 60%. Japan replaced Vietnam from the third slot (as seen in CY'23) with 1.18 mnt (0.83 mnt), recording a y-o-y increase of 42%.

High domestic demand and competitive landed offers from China and Vietnam pushed imports higher in the last fiscal. However, after BIS licence was made mandatory, India's steel imports fell drastically from 1.28 mnt in November'23 to 0.52 mnt in March'24.

What to expect in near term?

According to market sources, although the certificate copy is awaited, sources opine that the certificate is valid till December'24.