India seeks WTO members’ views on steel import norm

India has sought comments from World Trade Organisation (WTO) members on the Steel Ministry’s proposal to make it mandatory for certain grades of stainless steel sold in the country to have quality certification from the Bureau of Indian Standards (BIS).

“Since the move could potentially slow down imports and also impact the quantities of steel imported, it is important to give a chance to exporting countries to voice their concerns and see if the relevant ones could be addressed,” a government official told BusinessLine .

Members have been given two months to respond. The proposal will be implemented three months after it is adopted, but no decision has been taken on its adoption.

Under the proposed order, it will be mandatory for manufacturers of identified stainless steel products, mostly used for making utensils and kitchenware, to obtain a valid licence from the BIS for use of the standard mark before starting regular production of such items. Imported steel products also have to conform to the specified standards.

“Upgrading the quality of the stainless steel products for protection of human health and safety,” is the rationale given by India for the proposed move in its WTO submission.

The bigger reason, however, maybe to control import of cheap steel. Since BIS will be issuing the licences for use of its standard mark, it is possible to impose some sort of indirect control on indiscriminate imports.

Possible delays by BIS in granting quality certifications could be a cause for concern for exporting countries and they may want to discuss the issue with India.

Last fiscal, steel imports into India grew 71 per cent to 9.32 million tonnes from the previous year. For the same period, India exported just 5.5 mt. The domestic steel industry has been complaining about sub-standard steel, priced cheaply, being imported into the country eating into the business.

“Asking WTO members for comments is an opportunity for countries to articulate their view normally before the measure comes in. We can have a look at their concerns and see if there is any need to change the measure,” said Abhijit Das of the Centre for WTO Studies.

Since the quality requirements are the same for both domestic and imported steel, India is not in violation of the ‘national treatment’ clause of the WTO, which states that foreign companies cannot be discriminated against vis-à-vis local companies.

“Considering the extremely strategic applications of stainless steel, the quality control order, if enacted, will go a long way in securing the interest of the domestic consumers. It will also benefit the public at large, considering the fact that we are exposed to stainless steel in one form or the other in all walks of life,” said NC Mathur of the Indian Stainless Steel Development Association, in an official statement.

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