Centre must remove unnecessary obstacles for steel import clearances

The manner of implementation of non-tariff barriers (NTBs) for import of steel by the Ministry of Steel is causing difficulties for many manufacturers and service providers, including those engaged in building infrastructure.  The government has issued quality control orders (QCOs) for about 800 items that include consumer goods (electrical appliances, batteries, etc.), construction materials (cement), food products (honey, edible oils, milk powder), chemicals (fertilizers, pesticides), automotive parts (tyres, batteries), textiles (yarn, fabrics), metals and alloys (steel) etc. The idea is to protect consumers. The items covered under such QCOs cannot be imported except from suppliers who obtain a license from the Bureau of Indian Standards (BIS) and thus, these restrictions act as NTBs.  However, advance license holders, export oriented units and units in Special Economic Zones can import such items even from other foreign suppliers, subject to certain conditions, for export production. Many foreign suppliers are not interested in going through the rigmarole for taking the BIS license.  The government has also introduced registration requirements such as steel import monitoring system (SIMS), paper import monitoring system (PIMS), non-ferrous metals importmonitoring system (NFMIMS) andso on for some more items. The Directorate General of Foreign Trade (DGFT) website contains simple processes, automating the procedures for registrations, calling for only a few details about the imports. Recently, the MoS introduced its own SIMS version called SIMS-2.  The QCOs for steel do not coverall varieties and specifications. Forthe steel varieties that are notcovered by any QCO, the importer is required to obtain a no objection certificate (NOC). For getting the NOC, the importer has to submit a declaration that the particular grade is not available from domestic manufacturers and cannot be substituted by any domestic alternatives. Many executives want to give this declaration only after getting in ability letters from the domestic steel producers. Thus, they find it difficult to get the NOCs within reasonable time.  Secondly, under SIMS-2 the importer is required to furnish, in addition to the import details, various technical details such as product grade, category, subcategory, type and subtype of steel and chemical and physical properties etc. In the SIMS-2 version, the BIS license of the supplier for QCO items (i.e. the Company Master List (CML) number) or NOC for items not covered under any QCO has to besubmitted for getting the registration. Sometimes, even if theforeign supplier has a BIS license and the CML number is furnished by the importer, the SIMS-2 version shows error because the master database in the system has not been updated. Without the SIMS-2 registration the bill of entry cannot be filed and any delay in filing the bill of entry entails penalties and demurrage due to delay in clearance of the imported goods.  Steel is a critical raw material for engineering and construction industries. Many import consignments are held up at the ports for want of SIMS-2 registration. Delays in steel procurements are causing heavy disruptions in production schedules and execution of projects. So, on Friday, the ministry waived the NOC requirement for goods that have already arrived at the ports and where bills of lading have been generated before December 4. The government should now remove unnecessary obstacles to obtain NOC and SIMS 2 registration for import of steel.