Japan Flags Issue of Steel Consignments Blocked at Indian Ports

In Simple terms:

What is a No Objection Certificate (NOC)?

1. A No Objection Certificate (NOC) is a mandatory certificate for certain steel products that have different specifications from the standard Indian requirements.
2. It is issued by the Ministry of Steel (MOS) to allow importers to clear steel consignments at customs.
3. The NOC is required when steel products are either voluntary certification or have different specifications from the Bureau of Indian Standards (BIS) certification.

Objective of NOC for Steel

1. Heavy Steel Imports: Steel is one of the major products imported to India.
2. Due to heavy imports, there is a risk of product dumping (cheap, low-quality products flooding the market).
3. BIS Certification: Most steel products are under the compulsory BIS certification (ISI Mark).
4. However, some steel products are under voluntary certification, meaning they are not required to meet BIS standards.
5. NOC Requirement: For these products, the Ministry of Steel requires an NOC to ensure compliance with quality standards and to avoid delays and penalties during importation and customs clearance.

Types of Requests for NOC

The Ministry of Steel has established a Technical Committee to inspect and analyze applications for NOCs. The NOC is granted per grade and per consignment.

1. NOC Application Types:

   1. Clarification in Advance (Before ordering the material)
   2. Clarification for Material in Transit
   3. Clarification when Material Reaches the Port of Destination

About Ministry of Steel :

The Ministry of Steel is an executive branch agency of the Government of India that is responsible for the planning and development of the country's iron and steel industry.

The ministry's responsibilities include:

1. Formulating policies for steel production, distribution, and pricing
2. Increasing steel production capacity
3. Monitoring capital expenditure and expansion programs
4. Ensuring adequate availability of raw materials
5. Promoting research and development in the steel sector
6. Monitoring the performance of iron and steel production
7. Facilitating mergers, acquisitions, and joint ventures
8. Enhancing customer satisfaction

What is SIMS Portal?

1. SIMS stands for Steel Importing Monitoring System.
2. SIMS portal is a dedicated portal to provide advance information about steel imports.

Who can register on the SIMS Portal? Who is required to fill out the application?

1. Actual User, importers, importing agents, Trader/brokers and Advance authorization user (for 100% Export purpose) can register on the SIMS portal.
2. Any business importing steel products covered under the registration program is required to create an application for concerned imports. 

What is the Quality Control Order (QCO)?

1. A Quality Control Order (QCO) is a rule issued by a government agency, like the Bureau of Indian Standards (BIS) in India.
2. It requires certain products to meet specific quality standards before they can be sold.
3. This means manufacturers and importers must get BIS certification to sell their products in the market.
4. The goal is to ensure high-quality goods for consumers, prevent the import of low-quality products, and support India’s Make in India initiatives.

5. Implementation: Companies need to obtain a BIS certification, which allows them to use the Standard Mark (ISI mark) on products that meet the prescribed standards.
6. Legal Basis: QCOs are issued under the Bureau of Indian Standards Act, 2016.
7. Impact: QCOs can act as a non-tariff barrier to restrict low-quality imports and promote domestic manufacturing.

Challenge

Description

Impact on Domestic Industry

Potential Solution

Impact of Government Policies

India’s policies like the Steel Import Monitoring System (SIMS) and Quality Control Orders (QCOs) are intended to protect domestic manufacturers from cheap imports.

These policies cause delays and increased costs for industries that rely on imported steel, especially small businesses.

Simplify or streamline the approval processes for imports to avoid unnecessary delays and reduce costs.

Challenges for MSMEs

MSMEs face challenges due to the high cost of domestic steel and delays in issuing NOCs.

Small traders and manufacturers find it hard to access affordable steel, relying on imports to stay competitive.

Provide easier access to imports for MSMEs by reducing bureaucratic hurdles and ensuring timely NOC issuance.

Price Fixing Concerns

MSMEs have raised concerns that large domestic manufacturers may be colluding to fix steel prices.

This makes it harder for smaller businesses to afford steel, hindering their ability to compete.

Monitor and regulate steel prices to prevent cartelization and promote fair competition among domestic producers.

Detention Costs and Shipping Delays

Delays in clearing steel shipments are causing high detention charges.

The ongoing delays are a financial strain for small businesses, driving up operational costs and affecting competitiveness.

Improve customs and port processing times to reduce detention charges and ensure quicker clearance of shipments.

About Bureau of Indian Standards (BIS):

1. The Bureau of Indian Standards (BIS) is the National Standard Body of India. It is a statutory body established under the BIS Act of 2016 with the primary goal of ensuring the standardization, marking, and quality certification of goods in India.
2. BIS aims to promote quality culture across industries, enhance consumer protection, and improve India's competitiveness in both national and international markets.

BIS's role includes:

1. Setting and ensuring compliance with national standards.
2. Certifying products for safety and quality.
3. Promoting consumer awareness about quality products and services.
4. Facilitating trade by improving the standardization of goods.

Historical Background

1. Indian Standards Institution (ISI) - 1947 to 1987

   1. Before BIS was formally established, India had the Indian Standards Institution (ISI), which was created in 1947 to set national standards and ensure quality in manufacturing.
   2. The ISI operated under the Indian Standards Institution (Certification Marks) Act, 1952 and the Indian Standards Institution (Certification Marks) Rules, 1955. It operated the ISI mark for certified products.
   3. ISI played a crucial role in India's industrial development, ensuring that products met certain safety and quality standards.

2. BIS Act of 1987

   1. In 1987, the Bureau of Indian Standards (BIS) was established under the BIS Act of 1986, which came into force on 1st April 1987. This replaced the ISI and expanded its mandate to include more industries and products.
   2. The goal was to create a national system of standards, ensuring that products in the Indian market were safe, reliable, and met national quality benchmarks.
   3. The BIS Act of 1987 granted BIS more regulatory authority over the standardization and certification of goods.
3. BIS Act of 2016
   1. In 2016, the BIS Act was updated to meet modern standards and requirements of a globalized economy.
   2. The new Act focused on improving consumer protection, mandatory certification, and ensuring that foreign manufacturers also adhered to Indian standards.
   3. The BIS Act of 2016 gives enhanced powers to BIS for enforcement, allowing stricter control over the quality and safety of products.
   4. This Act also aimed at promoting the "Make in India" initiative by regulating both domestic and foreign products sold in the Indian market.

Key Functions of BIS

1. Standards Formulation:

   1. BIS is responsible for developing Indian Standards for various products and services to ensure consistency, safety, and quality.
   2. These standards help in ensuring that products meet national benchmarks and are reliable for consumers.

2. Product Certification Scheme:

   1. BIS offers product certification through schemes like the ISI mark, which is granted to products that conform to Indian standards.
   2. This certification helps consumers identify quality products in the market.
   3. Certification is voluntary or mandatory depending on the product category.

3. Compulsory Registration Scheme (CRS):

   1. Under this scheme, certain products must be registered with BIS before they are sold in India.
   2. This helps ensure that only products meeting national quality standards are available in the market.

4. Foreign Manufacturers Certification Scheme:

   1. BIS certifies products from foreign manufacturers to ensure that they meet Indian standards before being imported into India.
   2. This ensures that only safe, high-quality products enter the Indian market.

5. Hallmarking Scheme:

   1. BIS operates a hallmarking scheme to certify the quality and purity of gold and silver jewelry.
   2. The BIS Hallmark assures consumers that the jewelry meets defined purity standards.

6. Laboratory Services and Recognition:

   1. BIS operates its own testing laboratories to test products for quality and compliance with Indian standards.
   2. It also recognizes third-party laboratories that meet international standards for product testing.

7. Consumer Affairs Activities:

   1. BIS takes various measures to protect consumer interests, ensuring that products available in the market are safe and reliable.

8. Promotional Activities:

   1. BIS conducts promotional campaigns to raise awareness about quality standards, product certifications, and consumer rights.
9. Training Services:
   1. BIS offers training services to industries, professionals, and the public, at both national and international levels, on understanding and complying with standards.
10. Information Services:
    1. BIS provides information to industries, consumers, and other stakeholders about standards, certification procedures, and quality-related issues.

BIS Organizational Structure

1. Headquarters: New Delhi
2. Regional Offices (ROs): BIS has five regional offices:
   1. Kolkata (Eastern)
   2. Chennai (Southern)
   3. Mumbai (Western)
   4. Chandigarh (Northern)
   5. Delhi (Central)
3. Branch Offices (BOs): BIS has a wide network of branch offices across India to offer certification services and act as links between the government, industries, and consumers. Some of the cities with branch offices include Ahmedabad, Bangalore, Pune, Lucknow, Nagpur, and Hyderabad.

BIS and Its Role in Trade

1. Promoting Exports: BIS helps Indian exporters by ensuring that their products meet international standards. This boosts the global competitiveness of Indian goods.
2. Import Substitution: By setting high quality standards for domestic products, BIS promotes the "Make in India" initiative, which reduces the dependency on imports and encourages local manufacturing.