Indian govt declares NOC rule for imports of non-standard steel grades to tighten quality norms

• India's steel imports increase 64% y-o-y in H1FY'25.
  
  
• India approves 594 out of 735 steel import applications from Japan.
  
  

The Indian government has implemented a strict approval process to regulate steel imports, requiring a No Objection Certificate (NOC) for importing non-standard steel grades. This move aims to address the challenge of low-quality steel imports, which has been a persistent issue despite the government's efforts to ensure quality control.

The Bureau of Indian Standards (BIS) has notified 151 standards covering 1,376 steel grades, ensuring that both domestic and imported steel adhere to these norms. Additionally, the Ministry of Steel has imposed Quality Control Orders (QCOs) to further strengthen quality criteria.

While steel imports can be facilitated through a BIS license, certain grades not covered by BIS standards may require a NOC from the Ministry of Steel. However, there have been instances of importers attempting to circumvent these regulations by importing steel with minor variations in grades, potentially compromising quality standards.

Last year, 1,136 applications were filed for importing steel grades that were neither internationally recognized nor covered by BIS standards. These applications often involved minor alterations in chemical composition or product measurements, suggesting an attempt to import cheaper, lower-quality steel. It is a matter of concern that many of these shipments were ordered without obtaining the necessary NOC from the Ministry of Steel.

Regarding steel imports from Japan, as of 31 October, 2024, 735 applications were received of which 594 were approved and granted NOCs by 26 November, 2024. Only 141 applications were rejected for not meeting the required norms.

Rising steel imports and domestic production

India's steel imports witnessed an increase of 64% y-o-y to 4.62 million tonnes (mnt) in H1FY'25 as against 2.81 mnt in the H1FY'24. While this may not seem significant relative to the country's total steel consumption, the influx of cheaper imports is impacting domestic steel prices, affecting both large and small producers.

India's domestic steel industry, particularly small-scale producers, play a crucial role in the country's manufacturing sector. To meet the growing demand for steel, the government aims to increase domestic production capacity to 300 million tonnes by 2030. However, the influx of cheaper imports could hinder this goal.

Outlook

The Indian government's focus on quality control and stringent import regulations are crucial to safeguarding the domestic steel industry. By maintaining high standards and addressing the challenges posed by low-quality imports, India can ensure a sustainable and competitive steel sector.