The Indian steel ministry has granted exemptions to 72 overseas integrated steel plants, including Japanese, South Korean and Russian producers, from the new steel input quality rules for imports.
South Korean steelmakers Posco and Hyundai, as well as Japan's JFE and Nippon Steel are among those that will not require mandatory compliance with Indian standards for the raw materials in their finished steel products. Russian producers Severstal and NLMK have also received exemptions, according to a ministry order dated 8 August.
The ministry last month clarified that foreign integrated steel plants which already had a Bureau of Indian Standard (BIS) certification for their steel products did not need separate licences for input materials. The ministry has now published a list of the suppliers which will be exempt from the new rule following applications from the overseas producers. The current list covers 202 BIS licenses and the ministry said it may provide more exemptions in the future after it receives applications for the same.
Some French, German, Italian and Swedish producers have also been exempt from the new rules.
South Korean and Japanese mills are major suppliers of finished steel to India, and benefit from zero customs duty under free-trade agreements with India. Russia is not typically active in the Indian import market but has recently sold sizeable quantities of hot-rolled coil (HRC) to India.
The steel's ministry's new rule, issued on 13 June, had sparked concerns among downstream sectors and small businesses that were reliant on imports to produce their goods. Market participants expected automotive production to be hit as imports of some steel grades that were not domestically produced would be considered non-compliant.
The exemptions of integrated plants have brought some relief to importers. But some experts said concerns for micro, small and medium (MSME) enterprises persist.
"MSMEs, which rely on rolling mills for small, flexible orders, cannot feasibly source directly from large integrated steel plants, making such upstream restrictions impractical," Ajay Srivastava, founder of think-tank Global Trade Research Initiative, said.
