Steel Comes Under QC: Punjab Industry Worries

Ludhiana, September 6, 2012: Ministry of steel has brought steel under the Quality Control.  This will come into force w.e.f. 12.09.2012.  Accordingly, all steel producers will have to be registered with Bureau of Indian Standards (BIS).

 

Accordingly the secondary producers of Punjab can’t produce and sell steel without the registration with BIS.  They have to conform to the BIS Standards.

 

Industrial users are trying their best to convince the government to withdraw this order as there will be huge crisis for the steel using industry.  This order seems to have come into being with the connivance of main steel producers who have been selling steel under cartelized manner.  Secondary producers like induction furnaces producing steel can’t afford to have registration with BIS and conform to their standards.

 

Steel producers are feeling the pinch of recession as the demand for steel is decreasing and they are having heavy inventories.

 

The steel import is increasing mainly from Japan and South Korea.  India has find a comprehensive economic partnership agreement with South Korea since January 2010.  Similarly country has signed a similar agreement with Japan in August last year.  Under this agreement import of goods from these countries into India will be at concessional rate of custom duty which will gradually reduce to nil by the year 2016-17.  Earlier this custom duty was 5% and at present steel will be imported with custom duty of 3.34%.  Other countries have to pay 7.5% duty to tap the Indian market.

 

Europe and America are facing severe recession and demand of steel is waning in these countries.  Rating Agency Fitch has warned that further steel production capacity closures are likely across Europe over the next 12 months.  The demand for steel is likely to be in the doldrums for quite some time.  The prices of steel in Eurpoe have drastically collapsed.  The steel production in China is also badly hit due to economic slowdown.

 

Our main steel producers have always been keeping the steel prices as high as possible to earn undeserved profit to the great disadvantage of the user industry. 

                                                           

Steel producers have always on the look out to discourage steel import into the country.  Now they have a technical tool in the shape of BIS to discourage imports and to handicap the secondary steel producers.

                                                                                                                                   

P.D. Sharma, President, Apex Chamber of Commerce and Industry (Punjab)    has written a letter to the Hon’ble Steel Minister Beni Prasad Verma with a copy to Prime Minister and Cabinet Secretary not to enforce quality control on steel on 12.09.2012.  Infact Chamber has strongly pleaded to scrap this provision altogether as the steel using industry will be put in to great hardship both in the matter of steel price and its availability.