Government to curb sub-standard steel imports

Why in news?

The Ministry of Steel is piloting a proposal to slap quality control regulations on tinplate and tin-free steel.

What is the proposal?

• The proposal, which would mandate domestic and foreign suppliers of tinplate and tin-free steel products to adhere to Indian quality standards (BIS).
• Both domestic and foreign suppliers need to bear the BIS mark.

What is the need of the proposal?

• Quality - The move is to reduce “unnecessary’’ and “sub-standard” imports of steel products and boost exports in order to address the problem of under-utilized capacity in the steel sector.
• Domestic Industry - The move comes in the wake of a strong push from the domestic steel industry.
• New capacity being set up by the domestic industry that is to come on stream shortly.
• The manufacturers like Tata-owned Tinplate Company of India (TCIL), O.P Jindal group’s JSW Vallabh Tinplate Pvt (VTPL) and Parikh Group of Companies’s GPT Steel Industries (GPT) together have a capacity of 660,000 tonnes.

What is the concern of MSME sector?

• Non-Tariff Barrier - Mandating foreign tinplate suppliers to adhere to BIS standards could discourage them from supplying to India making the move a non-tariff barrier.
• Auto industry sources said there was no incentives for the foreign steel makers to get BIS certification as volumes are low in India.
• Lack of Domestic Industries - High grade steel, which is used for meeting safety standards among others, is not manufactured here.
• These are imported from abroad as there is no economy of scale to manufacture these in India.
• Also, at present there are only few domestic manufacturers of these products are able to supply to these MSMEs at reasonable rates.
• So it may hit a “large” number of Micro, small and medium enterprises involved in making products using tinplate steel — sheets of steel coated with a thin layer of tin that have specialized use in consumer products like cans, hair clip, pen.
• The idea is to restrict imports, but it would be a huge problem for the industry because it is already more expensive than other materials like plastic and paper packaging materials.
• So this order will make MSMEs material more expensive and it may lead to Job loss.

What needs to be done?

• The Ministry of Steel may have to consider, giving MSME an “appropriate staging period” so that businesses in India get due time to prepare themselves.
• The ministry may have to ensure that the few domestic manufacturers of these products are able to supply to these MSMEs at reasonable rates.

Quick Facts

BIS

• BIS is the National Standard Body of India.
• It is established under the aegis of the Ministry of Consumer Affairs, Food & Public Distribution. It is established by the Bureau of Indian Standards Act, 1986
• The major functions of the Bureau are the formulation, recognition and promotion of the Indian Standards.
• Its headquarters are in New Delhi.
• It represents India in the International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC) and the World Standards Service Network (WSSN).
• According’s to Bureau of Indian Standards, steels can be designated either based on letter symbols {IS: 1962 (Part I)—1974} or based on numerals {IS: 1962 (Part II)}.

Source: Indian Express