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Port delays and regulations strain India’s steel user industries: GTRI
Industry News- Nov 19,24
Policies designed to protect domestic steelmakers, such as import restrictions and quality control measures, have inadvertently hurt industries dependent on imported steel, undermining their production and export capacities.
India's 10,000 steel user units are grappling with operational and financial challenges due to prolonged port delays and cumbersome regulatory processes, according to the Global Trade Research Initiative (GTRI). The think tank has called on the government to streamline import procedures and digitise systems to alleviate the strain on the sector.
Policies designed to protect domestic steelmakers, such as import restrictions and quality control measures, have inadvertently hurt industries dependent on imported steel, undermining their production and export capacities. Ajay Srivastava, Founder, GTRI, noted that essential imports for manufacturing are subjected to excessive scrutiny, further exacerbating delays and costs.
Key regulatory hurdles include the Steel Import Monitoring System (SIMS), which requires detailed declarations before goods arrive, and Quality Control Orders (QCOs), which mandate Bureau of Indian Standards (BIS) registration for certain steel products. However, customs authorities have extended these requirements to items outside the QCO’s scope, often demanding BIS No Objection Certificates (NOCs), which are rarely issued promptly. Additionally, technical glitches in the SIMS platform contribute to further delays.
GTRI also raised concerns about some Free Trade Agreements (FTAs) that allow Indian firms to partner with foreign producers and re-import steel at concessional rates, creating competitive imbalances.
To address these challenges, GTRI recommends clear and transparent policies, efficient digital systems, and a focus on domestic production of high-quality specialty steel. It urged the government to limit QCO mandates to steel produced in sufficient quantities domestically and to revamp SIMS for smoother operations. Without these measures, policy-induced bottlenecks could hinder India’s ambitions for global manufacturing leadership, GTRI warned.
India’s steel ecosystem comprises two segments: steelmakers and steel-user industries. The latter transforms raw steel into value-added products, including specialty steel, stainless steel, and fabricated components, which are crucial for the broader economy.
(Business Standard)
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