The Global Trade Research Initiative (GTRI) has raised alarm over a recent directive from the Ministry of Steel, cautioning that the abrupt policy shift could severely impact micro, small, and medium enterprises (MSMEs) that depend on imported semi-finished steel.
The order, issued on 13 June, mandates that raw materials and intermediate inputs used in steel manufacturing must also comply with Bureau of Indian Standards (BIS) specifications. The directive, effective for all consignments with a bill of lading dated 16 June or later, significantly broadens the scope of India鈥檚 Quality Control Orders (QCOs), extending compliance obligations to input materials such as billets, slabs, and hot-rolled coils.
This sudden expansion has caused widespread concern in the MSME sector, where companies fear operational disruptions and financial strain due to the lack of preparation time and new traceability requirements.
GTRI founder Ajay Srivastava criticised the policy鈥檚 sudden implementation, pointing out that many MSMEs have already paid for shipments that could now be non-compliant under the revised rules. 鈥淭his abrupt change could disrupt supply chains and impose heavy compliance costs on MSMEs reliant on imported semi-finished steel,鈥� GTRI stated.
The updated framework now requires that input materials used in foreign steel plants producing BIS-certified steel must themselves meet Indian standards鈥攁 condition that GTRI estimates could take six to nine months to meet. The lack of stakeholder consultation and the mere three-day notice before enforcement have drawn particular criticism.
The traceability clause poses a significant challenge for MSMEs, many of which lack long-term contracts or the market influence needed to ensure upstream suppliers obtain BIS certification.
Industry stakeholders are urging the government to introduce a phased rollout or grace period, allowing smaller firms sufficient time to adjust to the new regulatory requirements.
While the Ministry of Steel frames the directive as part of its broader quality control and import substitution strategy, GTRI has warned that the lack of transitional safeguards could result in large-scale disruptions, especially in labour-intensive segments of the steel-consuming MSME sector.
