India's New Steel-Import Rule Triggers Panic Among MSMEs: GTRI

A last-minute regulation by the Ministry of Steel has sent shockwaves across India's small and medium manufacturing units, with many warning of plant shutdowns, financial losses and disruptions to supply chains, according to the Global Trade Research Initiative.

The new rule mandates that not just finished or semi-finished steel, but even the raw materials used to manufacture them overseas must now comply with the Bureau of Indian Standards' norms.

The order, issued last Friday and effective from shipments with a bill of lading dated June 16 onwards, leaves businesses with effectively no working day to comply.

The requirement applies to imports of steel under existing Quality Control Orders and has immediate implications for manufacturers who depend on imported inputs like slabs or hot-rolled coils to produce finished goods, such as cold-rolled coils, GTRI founder Ajay Srivastava said on Tuesday.

The MSMEs say they are being penalised retroactively for goods already in transit or contracted months ago. Many have paid advances for shipments that now risk being turned away at Indian ports.

The BIS registration for upstream suppliers, often spread across countries, can take six–nine months. The ministry's abrupt move, with no formal consultation or transition period, has raised questions over intent and execution, especially with reports of price hikes by a domestic steel major just hours after the rule change.