Certificate of Conformity Requirement Continues To Restrict CRGO Availability: Industry

New Delhi, Jul 1 (KNN) The temporary withdrawal of the Quality Control Order (QCO) on Cold Rolled Grain Oriented (CRGO) steel has had little practical impact on the market, as mandatory Certificate of Conformity (CoC) requirements continued to restrict the use of non-BIS compliant material, according to industry experts.

CRGO is a specialised silicon-alloyed electrical steel with a highly aligned crystal grain structure that enables efficient magnetic performance and reduces energy losses in transformers and other electrical equipment.

The Ministry of Steel had suspended the QCO on CRGO steel for one year, a period that is now set to expire, following which the quality control norms are expected to be reinstated.

Issue of CoC Framework and BIS compliance

Commenting on the issue, Ajay Sanghi, Managing Director, Sri Krsna Sudarshan Urja, said the withdrawal of the QCO did not materially alter market conditions and help MSMEs because manufacturers were still required to comply with the Certificate of Conformity (CoC) framework.

He explained that manufacturers of power transformers, whether sourcing CRGO directly from producers or through processors, must possess a CoC certifying that only Bureau of Indian Standards (BIS)-compliant material has been used.

According to Sanghi, this requirement effectively ensured that only BIS-certified CRGO steel could be used, even in the absence of the QCO, thereby limiting the number of eligible suppliers.

Policy Objectives Need Greater Clarity 

Sanghi said the government's objectives behind the policy should be clearly defined. If the intention is to reduce dependence on Chinese suppliers, achieving that objective may prove difficult, he noted.

He also referred to the government's stated aim of discouraging the use of recycled CRGO steel but cautioned that the policy could produce unintended consequences.

According to Sanghi, widening the price gap between new and recycled CRGO steel could increase the economic incentive for buyers to opt for recycled material instead of discouraging its use.

Impact on MSMEs

The limited impact of CRGO QCO withdrawal due to continued CoC and BIS compliance requirements means MSMEs in transformer and electrical equipment manufacturing still face restricted supplier options and compliance costs. 

While regulatory stability ensures quality standards, it also limits cheaper sourcing alternatives, affecting cost competitiveness and flexibility for MSMEs in the sector.

(KNN Bureau)