Steel Ministry’s New Import Rule Deepens MSME Woes: GTRI Flags Risk of Losses

India's small and medium enterprises (MSMEs) are staring at a fresh regulatory hurdle that threatens to disrupt operations and trigger financial losses. A recent directive by the Ministry of Steel now mandates that not only imported finished and semi-finished steel but also the raw materials used in their manufacture must comply with Bureau of Indian Standards (BIS) norms.

While the move aims to enhance quality control, its sudden implementation has left MSMEs scrambling, especially those with ongoing shipments and long-term contracts.

Sudden Rule Leaves MSMEs Exposed

Issued on June 13, 2025, the new order requires all steel imports—including slabs, billets, and hot-rolled coils—to meet BIS specifications. The rule applies to any shipment with a bill of lading dated June 16 or later. For many MSMEs that rely heavily on imported semi-finished steel, this last-minute regulation has come as a shock.

According to the Global Trade Research Initiative (GTRI), several firms already have in-transit shipments that now risk being rejected at Indian ports due to non-compliance.

GTRI: Limited Transition Time Raises Concerns

GTRI Founder Ajay Srivastava expressed concern over the swift rollout of the Quality Control Order (QCO), noting that it was implemented with limited notice and without prior stakeholder consultations.

He highlighted that the short transition window may pose significant challenges for MSMEs, particularly those with limited capacity to make quick adjustments to such regulatory changes.

Certification Hurdles for Foreign Suppliers

One of the most pressing issues is that BIS certification for overseas suppliers—especially for raw materials—can take anywhere from six to nine months. This makes immediate compliance virtually impossible for manufacturers who had placed import orders well before the new rule was introduced.

The traceability requirement now placed on foreign manufacturers adds another layer of complexity and cost.

Calls for Implementation Delay

Industry bodies and trade associations are urging the government to delay the implementation of the order and engage in broader consultation. The sudden policy shift, they argue, disproportionately affects smaller businesses that do not have the supply chain flexibility or legal muscle to renegotiate international contracts on short notice.

Read More: Startups and MSMEs See 310% Growth in Patent Filings Over 5 Years.

Conclusion

Until further clarity or a transition framework is provided, the new steel import standards may pose short-term challenges for MSMEs navigating compliance requirements. As the sector continues to recover from global disruptions, timely dialogue between industry stakeholders and policymakers could help ease the adjustment process and support smoother implementation.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.