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India Relaxes Steel Import Standards

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India said on Wednesday, 7 August, some steel products can be imported for certain critical applications without local quality certification, a move that could further hit domestic suppliers after imports rose 15 per cent last fiscal year.

Imports into India, the world's fourth-largest producer, rose to 7.87 million tonnes, worth $6 billion, in the year ended March 2013 as mills operated below capacity due to a shortage of iron ore. Japan, South Korea and China are the top exporters.

India said imports for projects in sectors such as infrastructure, petroleum, nuclear reactors and defence would be exempted from applicable local quality standards if at least Rs 1,000 crore is invested in such a project.

The exporters will, however, have to obtain quality certificates from their country of origin, a notification from the commerce and industry ministry said.

"This will help companies like Larsen & Toubro and Reliance Industries import steel specific to their needs, without the supplier having to go through the hassles of getting local certification," said a steel ministry official.

The senior official, who requested anonymity, said that domestic steel companies might oppose the move as a local-certification rule had acted as an indirect trade barrier.

Tata Steel, JSW Steel, Jindal Steel & Power and Essar Steel are the top steel makers in India, Asia's third-largest economy.

"This move will destroy the industry that is already suffering from raw material shortages and higher imports," said D.S. Rawat, secretary general of lobby group Assocham.

Assocham will send a letter to Prime Minister Manmohan Singh requesting him to reconsider the decision, Rawat told Reuters.