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Port delays and red tape strain India’s 10,000 steel user units

These challenges have started to take a toll on the production and export

Published

2 weeks ago

November 22, 2024

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Over 10,000 steel user units in India are grappling with operational and financial difficulties due to significant port delays and complicated regulatory hurdles, according to the Global Trade Research Initiative (GTRI). These challenges have started to take a toll on the production and export capabilities of several industries reliant on imported steel. GTRI has called on the Indian government to streamline import processes and digitize systems to provide much-needed relief to the sector.

The think tank highlighted that policies aimed at protecting domestic steelmakers, such as import restrictions and quality control measures, have unintentionally hurt industries that rely on imported steel for manufacturing. These regulations, while beneficial to local producers, have caused severe delays in shipments and increased costs for companies using steel in their production processes.

In a statement, GTRI Founder Ajay Srivastava emphasized that over 10,000 steel user units are currently facing severe financial strains, threatening their ability to remain operational and continue exporting goods. These industries, which play a critical role in India’s manufacturing sector, are finding it increasingly difficult to maintain supply chains due to the excessive scrutiny of imports.

One of the key factors contributing to these delays is the government’s Steel Import Monitoring System (SIMS), which requires detailed declarations of steel imports before they arrive in the country. However, the process has led to confusion, as customs officials have extended these requirements beyond the steel products subject to quality control orders (QCOs), demanding unnecessary No Objection Certificates (NOCs) from the Bureau of Indian Standards (BIS) for items that do not fall under these regulations. The delay in obtaining NOCs from BIS has led to longer clearance times at ports, further straining the steel user units.

Additionally, the Steel Ministry’s SIMS system, designed to monitor steel imports, has often malfunctioned, causing delays and complications in the clearance process. GTRI has urged the government to implement clearer, more efficient procedures for monitoring imports, as well as focusing on digitizing the clearance system to reduce bottlenecks.

The think tank also pointed out that Free Trade Agreements (FTAs) need to be carefully reviewed. Some FTAs have allowed foreign producers to re-import steel at concessional rates, raising concerns about the growing competition faced by domestic steelmakers. GTRI stressed that if import restrictions are necessary, they should be enforced through well-defined policies rather than through procedural roadblocks that disrupt the smooth functioning of the sector.

In conclusion, GTRI called for reforms in the steel import process, suggesting that the government must focus on developing a framework that supports both domestic steelmakers and industries dependent on steel imports. Without these improvements, the think tank warned, India’s broader manufacturing sector and its global manufacturing aspirations could face significant challenges.

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SAIL Signs MoU with John Cockerill India for Green Steel

SAIL is focused on transforming its operations and adopting advanced technologies

Published

2 days ago

December 4, 2024

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Steel Authority of India Limited (SAIL) has entered into a strategic partnership with John Cockerill India Limited (JCIL) to advance green steel production and technology within the steel industry.

The Memorandum of Understanding (MoU) was signed in Mumbai between SAIL Director (Finance) Anil Kumar Tulsiani and JCIL Managing Director Michael Kotas. This collaboration will focus on improving technologies in cold rolling, carbon steel production, green steel, and specialized silicon steels.

The partnership also aims to integrate green technologies into traditional iron and steelmaking processes to reduce carbon emissions and enhance resource efficiency. This move aligns with SAIL’s sustainability goals and its commitment to reducing the environmental impact of steel production.

SAIL is focused on transforming its operations and adopting advanced technologies to contribute to a greener future in the steel industry. The MoU marks a significant step towards the company’s vision of sustainable growth.

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India Considers ‘Safeguard Duty’ to Control Steel Imports

Indonesia’s steel consumption is around 17 mt.

Published

3 days ago

December 3, 2024

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India is exploring the implementation of safeguard duties to curb the influx of steel at low or zero tariffs under the free trade agreement (FTA) with the ASEAN region. This move comes as Chinese companies expand their steel manufacturing capacities in ASEAN countries.
Discussions are underway between the steel and commerce ministries, ahead of the next India-ASEAN FTA review talks scheduled for February. Industry experts report that Chinese firms are adding approximately 97 million tonnes (mt) of blast furnace-basic oxygen furnace (BF-BOF) capacity in ASEAN, expected to be operational within the next 5-6 years.
With annual steel consumption in ASEAN at around 75 mt, there are concerns that the surplus production could be redirected to India due to the tariff advantages under the India-ASEAN FTA. “Discussions are ongoing, and measures like imposing a safeguard duty are being considered,” a senior government official said.
Alok Sahay, Secretary General of the Indian Steel Association, noted that the influx of 97 mt of new BF-BOF capacity in ASEAN countries poses a threat to Indian steel producers. “Given the current FTA and the limited growth in ASEAN’s consumption, these new capacities are mainly for export. India’s low-to-zero tariffs make it an attractive market compared to the EU or the US,” Sahay added.
The South East Asia Iron and Steel Institute (SEASI) projects that the region’s steel production capacity will reach 145 mt by 2026. Praful Venugopal, CEO of Mittal Steel Indonesia, mentioned that Chinese producers have signed agreements with Indonesia to set up plants that will contribute an additional 20 mt of capacity. Indonesia’s steel consumption is around 17 mt, and these new plants are designed to supply exports.
The anticipated oversupply from ASEAN could lead to depressed domestic steel prices in India, where production in FY24 was 139 mt, just slightly above consumption of 136 mt.
(ET)

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Steel Ministry restricts import of substandard products

The BIS has established 151 standards encompassing 1376 steel grades under the Steel Ministry’s QCO.

Published

3 days ago

December 2, 2024

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The central government has identified instances of substandard steel imports and has taken measures to prevent their entry into the country. The Ministry of Steel stated that cheaper imports tend to lower domestic steel prices and negatively impact both large and small steel producers.

According to the ministry, numerous traders and manufacturers have been attempting to bypass the Bureau of Indian Standards (BIS) requirements by making minor alterations to steel grades. Official reports indicate that this appears to be an effort to import inexpensive steel under the guise of different grades.

The BIS has established 151 standards encompassing 1376 steel grades under the Steel Ministry’s Quality Control Orders (QCO). The ministry emphasized that this framework ensures compliance with BIS standards for both domestically produced and imported steel. The statement further highlighted that these measures are aimed at restricting the import of low-quality steel.

While steel imports require a BIS license, certain grades not yet covered by BIS standards may be imported with a No Objection Certificate (NOC) from the Steel Ministry. However, the ministry noted instances of misuse of this provision. Officials observed that many traders and manufacturers have been modifying steel grades slightly to circumvent BIS requirements.

Official data revealed that import applications for 1136 additional grades have been submitted to the Steel Ministry. Most of these grades are reportedly neither internationally recognized nor covered by BIS standards. They often involve minor variations in chemical composition or product dimensions and appear to facilitate the import of cheaper steel under the pretext of alternative grades. Furthermore, many of these shipments were ordered without obtaining the requisite NOC from the ministry.

Addressing concerns regarding restrictions on Japanese steel imports, the ministry clarified that 735 applications for importing Japanese steel had been received. Of these, 594 were approved, while 141 were denied due to non-compliance with established norms.