Why in news?
The Ministry of Steel is piloting a proposal to slap quality control regulations on tinplate and tin-free steel.
What is the proposal?
- The proposal, which would mandate domestic and foreign suppliers of tinplate and tin-free steel products to adhere to Indian quality standards (BIS).
- Both domestic and foreign suppliers need to bear the BIS mark.
What is the need of the proposal?
- Quality - The move is to reduce “unnecessary’’ and “sub-standard” imports of steel products and boost exports in order to address the problem of under-utilized capacity in the steel sector.
- Domestic Industry - The move comes in the wake of a strong push from the domestic steel industry.
- New capacity being set up by the domestic industry that is to come on stream shortly.
- The manufacturers like Tata-owned Tinplate Company of India (TCIL), O.P Jindal group’s JSW Vallabh Tinplate Pvt (VTPL) and Parikh Group of Companies’s GPT Steel Industries (GPT) together have a capacity of 660,000 tonnes.
What is the concern of MSME sector?
- Non-Tariff Barrier - Mandating foreign tinplate suppliers to adhere to BIS standards could discourage them from supplying to India making the move a non-tariff barrier.
- Auto industry sources said there was no incentives for the foreign steel makers to get BIS certification as volumes are low in India.
- Lack of Domestic Industries - High grade steel, which is used for meeting safety standards among others, is not manufactured here.
- These are imported from abroad as there is no economy of scale to manufacture these in India.
- Also, at present there are only few domestic manufacturers of these products are able to supply to these MSMEs at reasonable rates.
- So it may hit a “large” number of Micro, small and medium enterprises involved in making products using tinplate steel — sheets of steel coated with a thin layer of tin that have specialized use in consumer products like cans, hair clip, pen.
- The idea is to restrict imports, but it would be a huge problem for the industry because it is already more expensive than other materials like plastic and paper packaging materials.
- So this order will make MSMEs material more expensive and it may lead to Job loss.
What needs to be done?
- The Ministry of Steel may have to consider, giving MSME an “appropriate staging period” so that businesses in India get due time to prepare themselves.
- The ministry may have to ensure that the few domestic manufacturers of these products are able to supply to these MSMEs at reasonable rates.
Quick Facts
BIS
- BIS is the National Standard Body of India.
- It is established under the aegis of the Ministry of Consumer Affairs, Food & Public Distribution. It is established by the Bureau of Indian Standards Act, 1986
- The major functions of the Bureau are the formulation, recognition and promotion of the Indian Standards.
- Its headquarters are in New Delhi.
- It represents India in the International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC) and the World Standards Service Network (WSSN).
- According’s to Bureau of Indian Standards, steels can be designated either based on letter symbols {IS: 1962 (Part I)—1974} or based on numerals {IS: 1962 (Part II)}.
Source: Indian Express
