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Steel quality control order duplicative and hurts MSMEs, says GTRI
The QCO issued by the steel ministry on June 13 that mandated certification from the Bureau of Indian Standards (BIS) for raw materials, has locked thousands of smaller firms out of the market while giving larger players an edge, GTRI has argued. Micro, Small and Medium Enterprises (MSMEs) that depend on imported semi-finished steel in sectors like auto components, precision engineering, and construction, are facing shipment delays, demurrage costs and cancelled contracts.
While the Madras High Court granted an interim stay on the order on July 17, the Steel Import Monitoring System (SIMS) portal still requires BIS certificate details, prolonging supply chain disruptions. The Steel Ministry, which has defended the order, saying it ensures parity between domestic producers and importers and prevents dumping of sub-standard steel, has moved the Supreme Court last week against the HC stay order.
The GTRI said the rule is 'duplicative, impractical and harmful to trade' as the BIS already audits overseas factories and verifies raw materials under the Foreign Manufacturer Certification Scheme (FMCS). The QCO could be interpreted as a non-tariff barrier under World Trade Organisation (WTO) rules, it noted.
'The primary value of certification lies in the final product that reaches the end user, not at every stage of the production process,' GTRI's report pointed out, adding that major economies like the United States, European Union and Japan do not require separate raw material certification if the final product meets quality standards.
The report also flagged potential market distortion, citing exemptions for finished products like welded pipes, which appear to favour value-added imports over domestic manufacturing. GTRI has pitched for an immediate suspension of the QCO, stakeholder consultations, exemptions for inputs verified under FMCS, and a 90-day transition period for future regulatory changes.
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The Print
3 hours ago
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Business Standard
10 hours ago
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