The Ministry of Steel has issued a clarificatory order dated 13th June 2025 regarding the enforcement of existing Quality Control Orders (QCOs) under the Bureau of Indian Standards (BIS). Although 151 BIS Standards have already been brought under QCOs, with the last such order issued in August 2024, no new QCO has been released since then. The recent order aims to clarify that intermediate materials used in the manufacture of final steel products must also comply with the relevant BIS Standards.

This clarification was deemed necessary to ensure parity between domestic and imported steel products. Indian manufacturers are required to use BIS-compliant intermediate materials, whereas imports of finished steel products have not been subject to the same requirements, creating a competitive disadvantage for domestic producers.

Compliance with BIS Standards for intermediate products is essential to ensure the quality of the final output. For instance, large volumes of coated steel are imported into India, using hot rolled (HR) or cold rolled (CR) coils as base materials. If these base materials are not BIS-compliant, the finished coated steel cannot meet BIS Standards, regardless of the compliance of the coating process itself.

The Ministry also highlighted concerns over the potential influx of substandard steel into the Indian market, driven by excess capacity and declining consumption in some countries. India, being the only large and fast-growing economy, is particularly vulnerable to the dumping of cheap steel. Without strict quality checks on imported intermediate inputs like HR coils, CR coils, or coated steel, the domestic industry could face serious challenges.

However, integrated steel plants that produce both intermediate and final products are not required to obtain separate BIS licences for each stage, as their existing certification covers the entire production process. The Ministry plans to issue further clarifications on this after consulting with BIS.

Concerns about a possible price increase due to this clarification have been dismissed, as India’s steel production capacity stands at 200 million tonnes, sufficient to meet domestic demand.

Globally, many countries have imposed safeguard duties and trade measures—such as sectoral tariffs and Tariff Rate Quotas (TRQs)—to block the entry of cheap steel into their markets. These protective steps further raise the risk of substandard steel being diverted to India. Such imports could harm India’s domestic steel sector, particularly small-scale producers, potentially leading to large-scale job losses.

India remains the only major economy where steel consumption has consistently grown above 12 per cent over the past three years. This growth is attributed to government-led infrastructure projects, private and public sector real estate development, and increased manufacturing of capital goods. To meet this rising demand, India will require steel manufacturing capacity of approximately 300 million tonne by 2030 and 400 million tonne by 2035, necessitating a capital investment of nearly $200 billion. The influx of substandard steel could severely undermine this goal by weakening the financial viability and investment capability of domestic steel producers.