Already labeled a protectionist regime, the Indian government recently issued notice to the World Trade Organization (WTO) of its intent to bring more stainless steel items under quality control, The Hindu Business Line reported.
The move has Indian importers of stainless steel worried.
According to the draft “Steel and Steel Products (Quality Control) Order 2019” issued recently by the Indian Steel Ministry, compulsory testing of steel items is necessary from the Bureau of Indian Standards (BIS). For now, this is applicable to 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, government’s draft order said.
India has around 50 carbon steel and three stainless steel products, including pipes and tubes, under such quality control. Now, it has notified the WTO of bringing 13 more steel items under the same regime.
The reason given for this new move is to ensure safety of infrastructure and the health of the Indian people.
The new move is bound to raise the hackles of some of India’s important trading partners, including the European Union. India’s explanation is that it cannot go merely by the international safety guidelines for production of steel, since many non-Indian producers do not have BIS certification.
India is seeing a glut of imported steel flooding its market. In March this year, imports had gone up as much as 46% to meet India’s increasing steel demand. Now, steel experts are worried that if more items are brought under the BIS quality control, it would lead to an increase in the domestic prices of steel.