A new quality control order (QCO) on stainless steel has triggered a clash between India’s MSMEs and the government. Importers say the rule has driven up domestic prices and created supply shortages.

In a letter dated 17 September, the Metals and Stainless Steel Merchant’s Association (MASSMA) asked the steel ministry for relief. It urged exemptions for shipments where buyers had already paid before the rule took effect in June.

Importers argue that the rule forces foreign mills to secure approval from the Bureau of Indian Standards (BIS). They say this has created a non-tariff barrier and pushed Indian prices far above global markets. Prices of 304 series stainless steel rose by US $60-90 per tonne abroad between 24 August and 10 September. In India, the same product went up by US $113.

The 304 series is widely used in kitchen appliances, industrial pipes and valves, and automotive parts. MSMEs that make such products say they now face survival challenges.

The QCO was notified on 13 June and enforced just three days later. It requires BIS approval not only for finished products but also for raw materials like stainless steel slabs and hot- and cold-rolled coils. On 11 July, the ministry exempted shipments made on or before 15 July.

Still, MSMEs remain under stress. The Federation of Associations of Maharashtra (FAM) wrote to the ministry on 18 June. It said the rule has put Rs 150 crore worth of advance payments at risk. Industry groups believe the move protects large domestic steelmakers but hurts small firms. Massma insisted that the ministry must address the plight of micro and small businesses.

Meanwhile, legal disputes have erupted. Shree Ramdev Metalex LLP challenged the 13 June notification in the Madras High Court. The court sided with importers, but the ministry has appealed in the Supreme Court.

Import data highlights the stakes. In June, 0.797 million tonnes of finished steel were set for import under 25,759 applications. South Korea supplied 34.6 per cent of May imports, while China accounted for 30.6 per cent. The automobile and components sector held the biggest share in June at 29.1 per cent.

Experts point out that Indian steel exporters also face non-tariff barriers overseas. They note that domestic demand remains critical. Meanwhile, the government is moving to ease friction. Mint reported on 19 September that officials are fast-tracking BIS approvals for Taiwanese steel mills.