India has notified to the World Trade Organization (WTO) its intention to bring more steel and stainless steel items under its quality control order — a move that is not likely to go down well with some members such as the EU.
“While New Delhi has explained that the move was necessary to ensure safety of infrastructure and health of the people, some members look at it as a non-tariff barrier to check imports,” a government official told BusinessLine .
According to the draft ‘Steel and Steel Products (Quality Control) Order, 2019’ circulated by the Steel Ministry recently, mandatory testing requirements from the Bureau of Indian Standards (BIS) have been prescribed for two categories of products.
Stampings/laminations/cores of transformers (with or without winding) have to be made from BIS standard marked steel sheet and strip conforming to certain Indian Standard (IS) specifications, according to the draft order.
Stainless steel pipes and tubes, too, shall have to be made from stainless steel products, as per specific IS prescription.
“The order…..applies to domestic production as well as imports……no person shall manufacture, store for sale, sell, distribute or import any such products given in the Table 2 (of the Order), which do not conform to the requirements specified….,” the draft order said.
India has already brought 50 carbon steel and three stainless steel products under the ambit of its quality control through two previous orders.
The European Union has been raising objections to the BIS mandatory quality certification system for steel imports and had demanded that New Delhi must accept the tests carried out in foreign accredited laboratories attesting compliance with Indian standards.
It had complained at the WTO that the requirement for re-testing by BIS authorised laboratories of the covered steel products, which have already been tested against the relevant international standards, created a non-tariff barrier to trade.
India had argued that BIS standards were necessary in order to take into account the manufacturing practices of India, and therefore international standards are insufficient.
With most steel-producing countries turning protectionist, Indian steel producers are facing a hard time in exporting their products and want their domestic market to be protected. While high quality standards for steel sold in the country, whether domestic or imported, is good for consumers and infrastructure, it adds more to the compliance costs of foreign suppliers than local producers.
Since it is expected that India would revert to being a net steel importer in 2018-19 after two years of being a net exporter, the government is being pushed by the industry to do more to check rising imports.