Steel Ministry's New Import Rules Spark Alarm Among MSMEs: Can Lead To Heavy Losses And Shutdown

June 17, 2025: India’s Ministry of Steel has introduced stricter import rules for steel, raising significant concerns among micro, small, and medium enterprises (MSMEs), who fear severe business disruptions due to the abrupt introduction of new compliance rules. According to the think tank Global Trade Research Initiative (GTRI), the Steel Ministry’s order dated June 13 could lead to massive financial losses and even potential shutdowns of plants that rely on semi-finished steel imports.

Key Aspects of the New Derivative

• Expanded Quality Control Scope: The new order, effective for shipments with a bill of lading dated June 16 onwards, broadens the existing quality control regime. It mandates that not only final and semi-finished steel products, but also the raw materials used in their production, must conform to Indian Standards (IS) as prescribed by the Bureau of Indian Standards (BIS).
• Raw Material Compliance: This implies that importers are now responsible for ensuring that materials such as slabs, billets, and hot-rolled coils, used by foreign manufacturers in producing BIS-certified steel, are themselves BIS-compliant. This initiative is part of the government’s broader effort to enforce stricter standards under Quality Control Orders (QCOs).

MSMEs at Risk: Paid Shipments Now Non-Compliant

GTRI has highlighted immediate risks to MSMEs, noting that numerous firms have already procured and paid for steel shipments that will now fail to meet the new compliance requirements. These materials, currently en route or under existing contracts, face rejection at Indian ports due to non-compliance.

“India’s sudden expansion of its steel import rules has sparked fears of major losses among small manufacturers. Industry groups say the new order gives businesses no time to comply,” said Ajay Srivastava, Founder of GTRI.

BIS Certification Bottleneck and Lack of Notice

Critics have also raised concerns about the practicality of the move. Srivastava noted that obtaining BIS certification for upstream suppliers typically takes six to nine months, yet the ministry provided only three days’ notice before enforcement, with no stakeholder consultation. He warned that this lack of preparation time could lead to widespread shipment rejections, contract breaches, and operational standstills for MSMEs.

The situation is evolving, but industry players are urging the government to reconsider the rollout timeline and offer transitional relief to avoid irreversible damage to the sector.

MSMEs Will Be Cautiously Waiting 

MSMEs are expected to tread cautiously in the coming weeks, closely monitoring the implementation of the new steel import norms. With many shipments already in transit and at risk of rejection, small manufacturers fear supply disruptions and financial setbacks. Until there is clarity or relief from the government, most players may pause fresh import deals or shift to domestic alternatives.

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