Domestic, imported steel to get NOC only after BIS certification
By TIOL News Service
NEW DELHI, NOV 28, 2024: INDIA'S steel imports have increased significantly for the first half of 2024-25 as compared to same period last year. While the steel imports for the first half of 2023-24 were 3.329 Million Tonnes, the imports have increased to 4.735 Million Tonnes in this year, a 41.3% increase. While the overall volume of steel imports, as compared to total consumption in the country, is not significant, cheaper imports lead to depression of domestic steel prices and affect steel producers, both large and small.
It is to be noted that of the 144.30 Million Tonnes of steel produced in the country in 2023-24, 58.93 Million Tonnes (40.84%) was produced by over 1002 small producers and 85.37 Million Tonnes (59.16%) was produced by the integrated steel producers. Hence, it is clear that the significant production in the steel industry is done by small producers spread over many clusters in the country who are equally affected by low steel prices.
As per the National Steel Policy, the country aims to achieve 300 Million Tonnes of steel production capacity by the year 2030 with present capacity at about 180 Million Tonnes. This means an additional capacity creation of 120 Million Tonnes, which correspondence to investment of estimated USD 120 billion or over Rs.10 lac crore. This is possible only if the steel industry, both large and small, has adequate capital investment capacity and low steel prices, due to dumping of steel in the international market, will adversely impact the capacity creation objective of the country.
It is also to be noted that India is the only large economy showing robust growth on the consumption side. The first half of 2024-25 has shown a growth of 13.5% in steel consumption. Even with a conservative demand growth of 10%, the country will need 300 Million Tonnes of capacity by the year 2030 to cater to about 265 Million tonnes of demand. If adequate domestic steel production capacity is not created, the country will become a net importer of steel and will depend on imports of steel for its infrastructure creation.
Bureau of Indian Standards (BIS) in consultation with Ministry of Steel has been taking steps to ensure that only quality steel is produced in the country or imported from outside. In this direction 151 BIS Standards covering 1376 Grades of steel have been notified and have been covered by Quality Control Orders by Ministry of Steel. This ensures that the steel produced domestically or imported from outside conforms to BIS standards and low-quality steel is neither produced or imported. Any import of steel from outside can also be done with a BIS licence. However, some steel grades, which are not yet covered by BIS standards, can be imported with a No Objection Certificate (NOC) from Ministry of Steel. It has been observed that many traders and manufacturers have been trying to import steel with minor alternations in steel grades to bypass BIS standard requirement. In last year alone applications for 1136 more grades have been filed with Ministry of Steel for import of steel. Most of these grades are neither internationally recognized nor covered in BIS standards. They just have minor variation in chemical composition or product measurements and seem to be an attempt to import cheap steel in the name of different grades. It is also to be noted that most of these shipments have been ordered without any NOC from Ministry of Steel. As far as applications for import of steel from Japan is concerned, it is to be stated that as on 31.10.2024, 735 number of applications were received on the Ministry's portal, out of which 594 number have been allowed and NOC granted till 26.11.2024. Only in 141 cases NOC have not been granted as the applications were not as per norms.
It is to be noted that NOC from Ministry of Steel is only to be given if the steel is not covered in BIS standards and Quality Control Orders. Attempts to import cheap steel in the name of different grades and to bypass BIS standards should not be encouraged as it will lead to sub- standard quality of steel and also affect domestic small and large manufacturers. Ministry of Steel is issuing NOCs as per above objective. An online portal for this purpose is already in place.
