Steel Industry Faces Turbulence After Sudden Quality Order Extension

India’s steel industry is headed for a storm after the Ministry of Steel suddenly extended the Quality Control Order (QCO) to extend into raw materials and inputs for steel production giving businesses less than one working day to comply.

The notification by the ministry on June 13, 2020, which was published on June 16, states that all steel inputs including imports must henceforth comply with the Bureau of Indian Standards (BIS) certification requirements. According to actors in the industry, manufacturers and importers have been completely taken by surprise, especially MSMEs, who argue that short-notice could lead to delayed supply chains as well as increased costs.

“This sudden requirement will choke imports and stall production,” said Panckaj N. Umrania, Executive Director at KND Steel. “It’s going to cause massive disruption manufacturers will struggle to comply, customers will face delays, and the compliance cost will rise steeply.”

The QCO’s impact extends globally. If a Malaysian supplier sells steel slabs to a Vietnamese firm, which then processes and exports them to India, both suppliers must now be BIS-certified a requirement many foreign exporters are unprepared for. As Indian importers scramble for documentation, overseas suppliers are expected to raise prices, compounding the burden on Indian businesses.

“There is no government support, and getting paperwork is a bureaucratic nightmare,” Umrania said. “One day’s notice is unworkable even a month wouldn’t be enough in the steel industry.”

Ajay Srivastava, founder of the Global Trade Research Initiative and former DGFT official, called the move unreasonable. “Importers got effectively zero working days to comply,” he said, noting the policy applies to all shipments with bills of lading dated June 16 or later.

“It’s especially tough for MSMEs importing semi-finished goods,” added Pankaj Chaddha, chairman of the Engineering Export Promotion Council of India. “They’ll be hit hardest by delays, paperwork, and cost hikes.”