In a move that has sent ripples across the steel industry, delays in the issuance of No Objection Certificates (NOC) for steel imports by the Indian government are reshaping the domestic market. This development has brought temporary relief to struggling domestic steel manufacturers but has also raised concerns over infrastructure costs and trade relations.
The NOC delays are expected to bolster domestic steel prices, providing much-needed respite to Indian producers grappling with falling steel prices and weakened demand. However, this measure, viewed by some as a non-tariff barrier, is drawing criticism for its potential to disrupt import-export stability. Under regulations by the Ministry of Steel and the Bureau of Indian Standards (BIS), steel imported into India must meet BIS quality standards. While 151 BIS standards covering 1,376 grades are already in place, steel grades not covered under these Quality Control Orders (QCOs) can only be imported with a special NOC.
Recently, the Ministry of Steel has been delaying these NOCs, citing concerns about the influx of non-compliant, low-quality steel imports. Japan, a key steel exporter to India, has already suspended shipments, leaving consignments stranded at Indian ports. Importers argue that this bureaucratic bottleneck will increase project costs across sectors like infrastructure and automotive. “Demanding BIS certification for products not covered under QCOs is unfair. This move is likely to push up the costs of several infrastructure projects,” said Manish Kedia, a steel importer based in Mumbai. The policy shift is being seen as a lifeline for domestic steelmakers, particularly small producers, who account for 41% of India’s production capacity. Over the past year, plummeting global steel prices have left many of these companies reeling. With imports constrained, domestic manufacturers are gaining pricing power, benefiting from reduced competition.
Jathin Kaithavalappil, Assistant Vice President at ChoiceBroking, noted that the reduced supply from imports, coupled with a revival in infrastructure and automotive demand, could support domestic producers. “The delay in government NOCs is likely to create upward pressure on domestic prices, benefiting local manufacturers,” he said. Anirudh Garg, Partner and Fund Manager at Invasset PMS, added that restricting imports via NOCs aligns with the government’s broader focus on boosting domestic manufacturing. “While direct import duties could lead to trade tensions and WTO scrutiny, non-tariff measures like NOCs achieve similar objectives more subtly,” he explained. The fallout from the NOC delays is already visible, with concerns growing over India’s trade relations. Importers have called for greater clarity and stability in government policy to avoid frequent disruptions.
“The government needs to establish a clear, long-term import-export policy instead of continuously tinkering with regulations,” said Kedia. While this move aligns with the government’s push for Atmanirbhar Bharat (self-reliant India), balancing domestic interests with international trade obligations remains critical. Policymakers will need to ensure that these measures support the steel sector without compromising the competitiveness of allied industries.
