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India notifies WTO plans to bring more steel items under quality control

Apr 4,2019

India has notified to the World Trade Organization (WTO) its plans 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 European Union (EU). A government official told, “While New Delhi has explained that the move was necessary to ensure the safety of infrastructure and health of the people, some members look at it as a non-tariff barrier to check imports.”


According to the draft circulated by the Steel Ministry recently, ‘Steel and Steel Products (Quality Control) Order, 2019’ mandatory testing requirements from the Bureau of Indian Standards (BIS) have been prescribed for two categories of products.


Laminations/cores of transformers (with or without winding)/ Stampings have to be made from BIS standard marked steel sheet and strip conforming to certain Indian Standard (IS) specifications, according to the draft order. As per specific IS prescription Stainless steel pipes and tubes, too, shall have to be made from stainless steel products.


The draft order said, “The order applies to domestic production as well as the imports no person shall manufacture, store for sale, sell, distribute or import any such products given in Table 2 (of the Order), which do not conform to the requirements specified.”


Through 2 previous orders, India has already brought 50 carbon steel and 3 stainless steel products under the ambit of its quality control.


The EU has been raising objections against 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 authorized 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 so as to take under consideration the producing practices of India and therefore international standards are inadequate. With most steel manufacturing countries turning protectionist, Indian steel producers face a tough time in exporting their product and want their domestic market to be protected. While a high-quality standard for steel sold in the country, whether domestic or foreign, is good for customers and infrastructure, it adds more to the compliance costs of foreign suppliers than local producers.


Since it is expected that India would return to being a net steel importer in 2018-19 after 2 years of being a net exporter, the govt. is being pushed by the industry to do more to check rising imports.