Cracking down on sale of cheaper quality steel, the government will constitute an “appropriate authority” and equip it with search and seizure powers to detect storage and sale of steel products, which fail to conform to the quality norms laid down by the Bureau of Indian Standards (BIS).
In its draft quality control order (QCO) prepared on Tuesday, the steel ministry has also directed that manufacturers of all steel products must register themselves with the BIS within 45 days of the QCO being notified in the official gazette. The move comes amid Prime Minister Narendra Modi’s views earlier this week asking domestic steel companies to gear up for producing 300 million tonne of steel by 2025, which includes nearly 3 lakh crore expansion and modernisation programme by public and private sector steel companies. It is aimed at curbing inflow of cheaper and poor grade steel from abroad, mainly from neighbouring China which is hitting the margins of domestic steel companies.
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Fresh steel products, which would be brought under the ambit of BIS Act 1986 and result in mandatory certification from the bureau include high carbon steel wire rods, pre-painted galvanised sheets and coils and aluminium zinc alloy metallic coated steel strips and sheets. Last year the steel ministry had asked producers of 15 steel items including thermo-mechanically treated bars to ensure BIS certification before selling them to buyers.
Those sellers failing to conform to BIS standards risk being raided and searched by the appropriate authority to be headed by a joint secretary level officer and comprising officials from BIS and directors or commissioners of industries of the state governments, “ according to the draft QCO.
The appropriate authority is to be empowered to “enter and search any premises and seize any steel and steel products….if they do not conform to specified standards,” according to the draft QCO. Such products, if confiscated, would be disposed off as scrap as per the scheme of testing and inspection of BIS, it says. The order also empowers the authority to issue directives to manufacturers and dealers if it notices them violating BIS standards. It can inspect books or documents of the steel producers or suppliers.
Till last month, the government was contemplating to levy fiscal measures like upping the import duty or imposing a safeguard duty to disincentivise cheaper steel imports into India. But following recent deliberations between, the officials of steel and finance ministries, it emerged that imposing stringent QCO would be far more effective in containing such imports, which domestic producers say could adversely impact the government’s Make in India programme. Modi last year had asked various ministries to initiate measures to cut down on needless imports, which triggers unease within the local industry.
The newly constituted Indian Steel Association, which is the apex body of the nation’s steel manufacturers had petitioned the government on November 4 last year to initiate firm measures to contain imports, which had risen to a “historic high” of over 8 MT in the last fiscal.