India’s Steel Imports Up 41%, BIS Enforces Quality Standards to Protect Industry

India’s steel imports have risen sharply in the first half of 2024-25, reaching 4.735 million tonnes, a 41.3% increase compared to 3.329 million tonnes in the same period last year. While this surge in imports does not represent a significant portion of the overall steel consumption, it has led to a decline in domestic steel prices, adversely affecting both large and small steel producers.

In 2023-24, India produced 144.30 million tonnes of steel, with 40.84% (58.93 million tonnes) coming from over 1002 small producers, and 59.16% (85.37 million tonnes) from integrated steel producers. The bulk of steel production is thus from small-scale producers across various clusters, and they too are impacted by falling prices due to cheaper imports.

India’s National Steel Policy aims to increase steel production capacity to 300 million tonnes by 2030, up from the current 180 million tonnes. Achieving this goal requires an estimated $120 billion (over Rs. 10 lakh crore) in investment. However, the influx of imported steel at low prices threatens to derail these efforts, particularly for small producers who may struggle to compete in such a price-sensitive environment.

India’s steel consumption has also been robust, with a 13.5% growth in the first half of 2024-25. Even if the demand grows conservatively at 10%, the country will need the additional production capacity by 2030 to meet an estimated demand of 265 million tonnes. Without adequate domestic production, India may find itself dependent on steel imports, potentially jeopardizing its infrastructure development goals.

The Bureau of Indian Standards (BIS), in collaboration with the Ministry of Steel, has enforced stringent quality control measures. Currently, 151 BIS standards covering 1376 grades of steel are enforced, ensuring that steel produced domestically or imported meets national quality standards. Any imports must comply with these standards or be accompanied by a No Objection Certificate (NOC) from the Ministry of Steel. However, there have been concerns about attempts to bypass these regulations by importing low-quality steel under minor variations of grades that are not internationally recognized. In 2023, 1136 applications for such grades were submitted, many without the necessary NOCs.

As of October 2024, 735 applications for steel imports from Japan were received, with 594 receiving approval and NOCs. The Ministry is cautious about issuing NOCs only for steel grades not covered by BIS standards and quality orders. Encouraging such bypasses could lead to the influx of substandard steel, undermining the domestic industry and affecting both small and large manufacturers.