NEW BIS FRAMEWORK FOR STEEL PRODUCTS - ECONOMY

New BIS Framework for Steel Products - ECONOMY

NEWS: The government aims to bring additional steel products under the Bureau of Indian Standards (BIS) framework.Plan includes revising the classification of steel standards to cover minor variations in imported products, thereby increasing scrutiny.

 

WHAT’S IN THE NEWS?

Objective: Prevent Steel Dumping

·         The revised standards are intended to curb unrestricted imports of cheap steel, primarily from China, the largest source of steel dumping in India.

·         Dumping refers to imports sold at prices below production costs, which undercuts the domestic industry.

Expanded Definition of Steel Grades

·         The government seeks to include all steel categories with minor deviations under BIS-defined steel grades.

·         Any remaining unclassified grades will have new standards defined by BIS within the next six months.

Reduced Need for No Objection Certificates (NOC)

·         Once standards are updated, NOCs from the steel ministry will only be required if a steel grade is not manufactured domestically or if import quantities are minimal.

Current Standards and Certification Process

Existing Steel Standards in India

    • India currently has 151 standards that cover 1,375 grades of steel.
    • BIS certification is mandatory for exporters, who must obtain a BIS license to comply with Indian quality standards.

Challenges with Current NOC Requests

    • Absence of strict grading standards results in frequent NOC requests, which often facilitate the import of low-cost, non-conforming steel.
    • The steel ministry faces an overwhelming number of these requests, necessitating stricter measures.

Appointment of Technical Consultant

    • The steel ministry has appointed Mecon as a technical consultant to assist BIS in identifying and defining new steel standards to further restrict steel dumping from China.

Background on Rising Steel Imports

Surge in Steel Imports

·         India’s steel imports rose by 41.3% from April to September FY25, reaching 4.7 million tonnes.

·         China contributed 31% of these imports, with South Korea and Vietnam accounting for 26% and 8.4%, respectively.

Concerns Over Vietnam as a Dumping Channel

·         Chinese companies reportedly use Vietnam to funnel steel into India, flagged by Indian government departments.

·         Vietnam’s steel imports to India amounted to 40,000 tonnes in the same period.

Benefits of the Expanded Certification Process

Supporting Domestic Steel Industry

    • Expanded BIS certification will create a level playing field by ensuring imported steel meets high-quality standards, benefiting local manufacturers.
    • Aditya Shrivastava from Jindal Steel and Power highlighted that quality standards boost consumer confidence in Indian-made steel, potentially increasing domestic demand.

Preventing Loopholes in Compliance

    • Enlarged certification standards prevent foreign manufacturers from bypassing regulations by making minor product modifications.
    • This stringent approach ensures fair competition and upholds the quality of steel products available in the market.

Source: https://www.livemint.com/politics/policy/steel-imports-bis-standards-domestic-industry-china-dumping-south-korea-vietnam-11730897226359.html