New steel import rule could disrupt supply chains and impose heavy compliance costs on MSMEs: GTRI

ANI June 17, 2025 309 views

The sudden steel import regulation mandating BIS certification for raw materials has sent shockwaves through MSME supply chains. Industry experts highlight how the 3-day implementation window leaves importers stranded with non-compliant shipments already in transit. GTRI's analysis reveals the domino effect - from Vietnamese processors to Indian fabricators - where every supply chain link now requires certification. The report urgently calls for policy revision to prevent what it terms an "avoidable industrial crisis" for small manufacturers.

"BIS certification for upstream suppliers can take six to nine months... enforced with only three days' notice" - GTRI Report
New Delhi, June 17: The recent regulation by the Ministry of Steel has the potential to disrupt supply chains and may impose heavy compliance costs on India's micro, small, and medium enterprises (MSMEs), according to a report by the Global Trade Research Initiative (GTRI).

Key Points

1

New rule requires raw material BIS certification for steel imports

2

MSMEs face compliance costs and shipment rejections

3

GTRI warns of factory closures without policy revision

4

Regulation enforced with 3-day notice sparks industry panic

GTRI said "the abrupt change could disrupt supply chains and impose heavy compliance costs on MSMEs reliant on imported semi-finished steel".

It adds that new regulation has triggered panic among MSMEs that depend on imported semi-finished steel, with fears of large-scale losses and plant closures

The rule, issued by ministry on June 13, mandates that not just the finished or semi-finished steel products, but also the raw materials used to manufacture them must comply with Indian Standards (IS) and be registered on the Steel Import Monitoring System (SIMS) portal.

The move applies to all products covered under India's Quality Control Orders (QCOs).

Earlier, foreign exporters could ship finished steel to India after getting certification from the Bureau of Indian Standards (BIS).

However, under the new regulation, their raw material, like billets, slabs, or hot-rolled coils, must also meet BIS standards.

For instance, if a Malaysian firm supplies steel slabs to a Vietnamese company that converts them into steel sheets before being exported to India, both companies must now be BIS-certified.

It also highlighted that many importers have already paid advances for shipments arriving between June and August, which now risk of being labelled non-compliant, even though contracts were signed months earlier.

Adding to the concern is the exemption given to finished products like welded pipes from the new traceability rule.

GTRI noted that there was no need for such compliance, especially when BIS officials already inspect and certify finished products at foreign factories.

It added "BIS certification for upstream suppliers can take six to nine months. Yet the Ministry has enforced the new traceability requirement with only three days' notice and no stakeholder consultation. Also, when BIS officials have already inspected and audited the products, say CR coils, at the foreign entity's facility physically and ensured compliance with the Indian standards, then where is the need to ensure the compliance of the raw material used to make it?"

GTRI asks the government to reconsider the move with a warning that without relief or extension, the order could result in widespread factory closures and financial distress.

Reader Comments

R
Rajesh K.
This sudden policy change is typical of our bureaucracy - no consultation with stakeholders! MSMEs are already struggling post-pandemic, and now this? Government should have given at least 6 months transition period. Make in India shouldn't mean Break MSMEs India. 😓
P
Priya M.
While quality control is important, the implementation seems rushed. Many small manufacturers in my industrial area are worried sick about their pending orders. The government must balance standardization with practical business realities. Hope they listen to GTRI's warning.
A
Amit S.
Good move long-term but terrible execution. We need to protect our steel industry from substandard imports, but destroying MSMEs in the process defeats the purpose. Why not phase this in gradually? Also, why exempt welded pipes? This selective application creates confusion.
S
Sunita R.
As someone whose husband runs a small fabrication unit, this is disastrous. We've already paid 30 lakhs for materials that may now be rejected. How are we supposed to survive this? Government babus making policies from air-conditioned offices don't understand ground realities. 😡
V
Vikram J.
Interesting how this comes right after India became net steel exporter. Maybe protecting domestic producers is the real agenda? Not against that, but be transparent about intentions rather than hiding behind 'quality control'. MSMEs deserve better policy clarity.
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Neha P.
The compliance costs will be passed to consumers eventually. We want 'Aatmanirbhar Bharat' but not at the cost of small businesses shutting down. There must be middle path - maybe temporary subsidies for MSMEs to meet new standards? Government should think creatively.
K

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Tags:
steel import rules MSME crisis GTRI report BIS certification supply chain disruption Ministry of Steel