India plans to impose stricter standards for granting advance authorisations on steel imports, aiming to limit the influx of large volumes of substandard inputs into the domestic market.
According to the Economic Times, citing informed officials, there have been instances of steel being sold in the local market that does not meet the Bureau of Indian Standards (BIS) specifications, despite being imported duty-free by export-oriented units under advance authorisations.
One official noted that part of this imported steel—originally intended for export production—is being diverted to the domestic market, causing government revenue losses and placing domestic steel producers at a competitive disadvantage.
Currently, India imposes a 12% safeguard duty and a 7.5% basic customs duty on steel imports, in addition to a Quality Control Order (QCO) that prohibits the import or sale of steel not meeting BIS standards within the country.
The advance authorisation scheme allows exporters to import raw materials duty-free and without complying with QCO regulations, provided the finished goods are exported within 18 months. However, officials say this long period increases the risk of substandard steel being diverted to the local market instead of being used for export-bound products.
The government is considering reducing the export obligation period to six months to minimise opportunities for such diversion. It also plans to withdraw the QCO exemption for domestic importers under this scheme to curb its misuse.