New Steel Import Rule Mandates BIS Certification for Raw Materials

Introduction

There is a recent growing emphasis on ensuring quality control in steel imports. This indeed has taken a sharp regulatory turn. With the Steel and Steel Products (Quality Control) Order, 2024 coming into force from June 16, 2025, the Ministry of Steel has made it a mandatory requirement that all the input materials used to produce steel products must also comply with Indian Standards (IS) and be traceable through the Steel Import Monitoring System (SIMS). Moreover, there has been a warning from the Global Trade Research Initiative (GTRI) regarding certain disruptions in the supply chain and heavy compliance costs that have to be incurred by businesses.

We can surely view it as a reasonable move to enhance product quality and ensure consumer safety, and facilitate the regulation of products that are of high quality and assured of long-term reliability. However, it is important to understand the mounting crisis for manufacturers and importers, both domestic as well as international, who now face the real risk of supply chain breakdowns, overload of compliance, and even losses and delays that might lead to factory shutdowns.

Let us delve deeper into this article and find out what the recent BIS mandate for steel states for input materials, what the potential impact of the same would be on various business entities, and why, irrespective of the criticisms, it is an essential regulation for the Indian market.

Understanding the New Mandate

The Quality Control Order (QCO), which is also known as the Steel and Steel Products (Quality Control) Order, 2024, applies to 151 Indian Standards covering steel and steel products under Chapters 72 and 73 of the ITC(HS) codes. This QCO is an integral aspect for ensuring the quality of all steel products. This new directive adds a critical clause that manufacturers and importers must consider in the market.

Here’s what this QCO entails:

• This new regulation states that the input materials, such as slabs, billets, coils, and sheets, must also meet Indian Standards if they are part of a QCO-compliant final product.
• This requirement will apply to all imports with Bills of Lading dated on or after June 16, 2025.
• Any non-compliant shipment, even if it was ordered and dispatched months earlier, will be deemed unfit and non-compliant for use in QCO-bound manufacturing.

Why is this QCO being called the Traceability Trap?

This new Quality Control directive or regulation is being seen as a “traceability trap” by several small manufacturers as well as importers. But why is this so? Let us decode:

• The new mandate doesn’t just ask that your finished product comply with Indian norms. Rather, it also insists that the entire material chain be verifiable under BIS certification.
• This means that even the raw materials starting from the earliest stage have to follow the BIS regulations to be compliant for further use in the industry.
• However, it is essential to note that many businesses source the raw materials from the global market due to better pricing or availability. Often, these imports arrive in bulk and are widely accepted internationally to be used for further processing in industries and manufacturing units.
• However, as per the new QCO regulations, these bulk materials and components will not be accepted by the new Indian regime. This is particularly because from now onwards, a BIS certification for each input material has become a mandatory compliance requirement for the Indian market.

This sudden shift has left manufacturers and importers of steel and steel-based products in a difficult situation to tackle. Materials and components that are already in transit or kept in stock may not meet the new requirements, and therefore, can’t be used legally in the Indian economy.

Impact of New BIS Directive on Businesses

The businesses involved in the manufacture and import of steel and associated raw materials are being significantly impacted by this new directive of the BIS. This is particularly because, unlike large corporations, small businesses are more vulnerable. They basically lack the financial backup and cannot wait for the lengthy BIS registration process. Here is how these will and are getting impacted by the new BIS regulations for steel:

• High costs of compliance

  There are high costs of meeting compliance requirements, as all raw materials must be BIS-certified, in addition to the mandatory certification for the finished steel product.

• Restricted imports

  Imports are also largely restricted, as there are stricter regulations and filtered steps to enter the Indian market through passing various benchmarks and market standards.

• Surge in raw material cost

  As the compliance cost will surge for manufacturers and importers, the raw material cost will also surge and make the entire production expensive for the end user.

• Disturbing supply chain

  Supply chain disturbance is also a major concern, as more compliance will lead to delays and disruptions.

• Stocked raw materials become unusable

  Imported raw materials that are already in warehouses will become unusable. Orders that are relying on specific grades of imported steel may come to a halt.

• Delayed shipments

  Shipments that were compliant at the time of dispatch may now be seized or denied clearance at ports, leading to unnecessary hassles and delays for businesses.

Seeing the Brighter Side: BIS Ensuring Quality and Safety

While businesses are getting impacted by the new BIS directive for steel raw materials in certain ways, like high compliance costs and delayed processes, it is also essential to understand the brighter side of the same. The new regulations for the steel industry are crafted by the Ministry to cater to the surging demands for quality and safety at every step. When the raw materials are BIS-certified and are then chosen for the manufacturing of the various products further, it eventually ensures high-quality products and regulation of goods and articles that can be trusted by the consumers.

Here is why this new BIS regulation for the steel industry holds significant value, despite facing criticisms:

• Enhanced product quality

  When all the input materials of any finished product have been rigorously tested and certified by the BIS, it leads to better product quality, which makes the products reliable and efficient for use.

• Safety checks

  The safety checks at every stage of the manufacturing of various products make them reliable and worthwhile investments to be considered by consumers in the Indian market.

• Better production processes

  The BIS-certified raw materials are used, which helps in enhancing the production processes and reducing the risks of failures or condemnation by market standards and benchmarks.

• Consumer trust

  Consumer trust gets established when the products are certified by the BIS and are thus regulated in the wider Indian economy to be used further. They can make informed purchase decisions and identify products that are credible.

• Fair and transparent trade economy

  The regulation of BIS-certified products, and the rigorous testing and verification at several steps, initiated from the very beginning of the manufacturing processes, helps in establishing a fair and transparent trade economy that can be relied upon.

• International recognition

  When businesses are compliant with the BIS regulations for steel products, they get international recognition as market benchmarks, and quality parameters must be adhered to, not just domestically but also globally.

Also Read: BIS Certification Guidelines for Iron & Steel Pipes, Tubes & Fittings

New Directive: Quality Control or Protectionism?

While the official narrative states that the new directive order is for consumer safety and product reliability, many in the industry argue that this rather seems to favor domestic large-scale steelmakers. But why is this so? If importers are blocked from using afford able or high-grade international materials due to a lack of BIS traceability, it will effectively shrink the supply chain to a few large domestic suppliers, who will eventually benefit in the long run.

Ensuring the structural integrity and safety of steel products is essential, especially in sectors like construction, transport, and manufacturing, where these products are rigorously used and demanded on a daily basis. However, quality enforcement should not come at the cost of economic dilemma and lessening options to survive in the competitive economy, especially for smaller businesses who are already dealing with high costs, fluctuating markets, and other challenges like labor shortages.

What are the solutions being suggested?

1. Phased implementation: Allowing a grace period or delayed enforcement of this QCO directive, to let importers finish the current stocks first and then strategize for the newer inputs accordingly.
2. Interim Acceptance: At least as an interim measure, BIS could recognize globally accepted certifications for traceability.
3. Fast BIS approvals: It is feasible to create a simplified process for MSMEs seeking BIS certification for input materials that will eventually help businesses in dealing effectively with the new regulations and compliance requirements in the Indian market.

Brand Liaison: Solving Dilemmas Through Compliance Consultancy

Brand Liaison is a top-notch and trusted compliance management consultant, serving businesses across the globe to seamlessly manage compliance and gain the necessary certifications for the Indian market. Businesses dealing with steel and input materials for the steel products can get in touch with our team of experts and gain the best compliance consultancy to proceed in the competitive Indian economy. We will let you understand the requirements, keep you updated with the recent BIS alerts, and make procedures simpler and more effective for you to easily navigate the Indian market and ensure eligibility in the same.

Conclusion

Policies like these new BIS steel regulations and traceability directives under the Steel QCO are surely well-intentioned, but without thoughtful implementation, there is always a lurking risk that they might hamper the functionality of businesses. Hence, a balanced approach is the need of the hour. As the June 2025 deadline approaches, there remains a divided perspective. Where one side believes this order to be efficient in regulating quality and safety in the end-to-end cycle, the other side views these regulations as one where compliance starts from the stage of raw materials and imports become further restricted. Therefore, it is essential to understand all aspects and manage compliance for steel and associated raw materials accordingly in the wide Indian market.

Brand Liaison is your best compliance partner, helping businesses move forward in the competitive Indian market. Contact our team of industry experts and professionals today, and make your business compliant and ready for the changing BIS updates and the widening Indian economy.