India’s New Steel Standards to Combat Chinese Dumping and Protect Domestic Industry

With an influx of low-cost steel imports from China impacting the viability of local businesses, the Indian government has announced plans to extend its steel standards under the Bureau of Indian Standards (BIS) framework. This move, combined with expanded steel classifications, is intended to tighten controls on imported steel and ensure a level playing field for domestic producers.

Rising Threat of Chinese Steel Dumping in India

Between April and September of FY25, India’s steel imports soared by 41.3%, with China accounting for 31% of these imports. This influx of cheaper steel, primarily from China and South Korea, has put intense pressure on local steel manufacturers. 

Many importers have been able to bypass existing standards by making minor variations to their products, making it difficult to enforce strict import regulations. The government’s new standards aim to close these loopholes by requiring compliance for a broader range of steel products.

Expanding BIS Steel Standards to Cover All Grades

India currently has 151 standards covering 1,375 steel grades. However, the variations within these grades allow some imports to evade regulation. By expanding the scope of BIS steel standards, the government aims to ensure that virtually all steel grades are covered, reducing the need for no-objection certificates (NOC) for imports and eliminating opportunities for products to bypass regulations. This move is expected to be finalised within the next 6 months.

Tightened Regulations for Improved Compliance

The steel ministry is working closely with BIS and has appointed Mecon as a technical consultant to help define and implement these new standards. By requiring that all steel imports adhere to BIS certification, the government aims to increase scrutiny of imported products. 

This ensures that any slight adjustments made by overseas manufacturers to bypass standards will be flagged, preventing substandard steel from entering the Indian market. By enforcing uniform quality standards, the government hopes to enhance consumer trust in Indian-made steel.

Additional Measures to Protect Domestic Producers

In addition to updating steel standards, the Indian government is exploring other protective measures for the domestic industry, including potential duty protections. The steel ministry is consulting with industry stakeholders and may recommend duty actions to the Directorate General of Safeguards to counteract dumping. 

Conclusion

India, once a net exporter of steel, has recently become a net importer, a trend that has continued into the current fiscal year. The increased importation of lower-cost steel has exerted downward pressure on domestic steel prices, affecting revenue for Indian steel companies. 

With the implementation of stringent BIS standards and potential duty protections, India aims to curb cheap imports, especially from China, and restore stability to its steel industry.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.