India Set to Slash Steel Import Curbs! Your Wallet & Industries Could See Big Changes Soon!

Author

Abhay Singh | Whalesbook News Team

Detailed Coverage:

The Indian government is preparing to relax import regulations for approximately 55 categories of specialty steel. These specific types of steel are often not manufactured in India or are produced in insufficient quantities and are crucial for sectors such as automobiles, transformers, and electrical equipment.

Currently, companies must source these imported steels from a select list of government-approved suppliers under Quality Control Orders (QCOs), which has made procurement difficult and expensive. The proposed change involves a temporary suspension of these stringent QCOs for a period of one to three years. This relaxation is expected to benefit steel exporters from countries including China and Vietnam.

Experts suggest that while the direct impact on domestic steel prices remains uncertain until specific grades are finalized, the move could potentially lead to a decrease in local prices. However, some believe the effect might be limited, especially if safeguard duties on steel imports are extended. The NITI Aayog has recommended excluding certain grades from QCOs.

Specialty steel refers to value-added steel products that undergo special processing like coating, plating, and heat treatment to achieve specific properties for strategic uses. Once the quality controls are suspended, Indian manufacturers will have the freedom to source from any suitable foreign supplier.

A gazette notification is anticipated soon. However, quality controls and licensing powers will be maintained for steel imports in critical sectors like healthcare devices and defence due to national interest.

Impact: This policy change could significantly affect domestic steel manufacturers and companies that rely on imported specialty steel. It may lead to increased competition and potential price adjustments in the domestic market. It also signals a move towards balancing the needs of end-user industries for cost-effective options with the protection sought by domestic producers. The impact rating on the Indian stock market is 7/10 due to its effect on the industrial and manufacturing sectors.

Difficult terms explained: Specialty Steel: Steel that has been processed or alloyed to possess specific properties like high strength, corrosion resistance, or heat resistance, tailored for particular applications. Quality Control Orders (QCOs): Government regulations that mandate certain quality standards for products, requiring them to be manufactured or imported only from certified or approved sources.