BIS and Customs fail to curb imports of substandard CRGO steel: ITMA
Updated: Sep 09, 2015 11:28:48am
New Delhi, Sept 9 (KNN) The quality certification mechanism introduced by the government to prevent scrap grade CRGO steel from entering the country is apparently not working, with imports of non-prime material continuing unhindered for use by the transformer industry.
The failure has put a spotlight on the role of the Bureau of Indian Standard (BIS) and the customs, the twin agencies which are supposed to work together to keep out non-prime steel.
Sources said sub-standard material is finding its way into the country as fake BIS licence copies are being generated and the customs is using the same to clear consignments.
To circumvent the quality control order, non-prime CRGO consignments are passed off as hot rolled plate imports. Some 2.75 lakh tonnes of electrical steel is consumed in India annually.
Sources said bulk of imports are coming via Nepal, where Indian companies have set up processing units, and entering India from eastern Uttar Pradesh and Bihar borders. It is not difficult to set up a processing unit as it hardly costs 10 lakh rupees.
Sources revealed that processors are taking the help of HR scrap smelters for importing low-quality CRGO. Some processors have set up units in special economic zones and free zones to import non- prime material against duty free licences and, after processing, the material is sold to transformer manufacturers here. Indian Transformer Manufacturers’ Association (ITMA) has written to bring this shady business to the notice of the directorate general of foreign trade (DGFT).
Companies importing CRGO steel have to deposit fees with the BIS which in turn issues documents certifying that material is not of scrap or sub-standard grade. The customs uses the same papers to clear consignments. It is clear that non-prime CRGO steel imports cannot enter Indian market if the government agencies do their job properly. However, that does not seem to be the case here.
What is even more disturbing is that BIS does not appear serious about tackling the menace of sub-standard CRGO steel imports which are playing havoc with the quality of transformers procured by utilities.
What gives credence to the suspicion is BIS’s non-cooperative role in this matter. ITMA in June made a request to the BIS for data relating to prime CRGO steel imported during last 12 months, which was followed by a couple of reminders. However, the latter has not yet complied with the request.
Scrap grade CRGO is available at just half of what prime steel would cost. No wonder transformer manufacturers using costly but high-quality and long-lasting CRGO steel find themselves at the receiving end of the government’s failure to check import of scrap grade material as they find the playing field heavily tilted in favour of unscrupulous players.
They are upset that despite being the nodal agency, BIS has not taken any step to fight this menace which encourages greedy companies to manufacture low-quality transformers that would not last more than 3-4 years although the normal life of such equipment is deemed to be more than 25 years. Apart from distorting market competition, poor-quality transformers lead to inflated equipment bills for utilities and also expand their carbon footprint. (KNN/NM)
The failure has put a spotlight on the role of the Bureau of Indian Standard (BIS) and the customs, the twin agencies which are supposed to work together to keep out non-prime steel.
Sources said sub-standard material is finding its way into the country as fake BIS licence copies are being generated and the customs is using the same to clear consignments.
To circumvent the quality control order, non-prime CRGO consignments are passed off as hot rolled plate imports. Some 2.75 lakh tonnes of electrical steel is consumed in India annually.
Sources said bulk of imports are coming via Nepal, where Indian companies have set up processing units, and entering India from eastern Uttar Pradesh and Bihar borders. It is not difficult to set up a processing unit as it hardly costs 10 lakh rupees.
Sources revealed that processors are taking the help of HR scrap smelters for importing low-quality CRGO. Some processors have set up units in special economic zones and free zones to import non- prime material against duty free licences and, after processing, the material is sold to transformer manufacturers here. Indian Transformer Manufacturers’ Association (ITMA) has written to bring this shady business to the notice of the directorate general of foreign trade (DGFT).
Companies importing CRGO steel have to deposit fees with the BIS which in turn issues documents certifying that material is not of scrap or sub-standard grade. The customs uses the same papers to clear consignments. It is clear that non-prime CRGO steel imports cannot enter Indian market if the government agencies do their job properly. However, that does not seem to be the case here.
What is even more disturbing is that BIS does not appear serious about tackling the menace of sub-standard CRGO steel imports which are playing havoc with the quality of transformers procured by utilities.
What gives credence to the suspicion is BIS’s non-cooperative role in this matter. ITMA in June made a request to the BIS for data relating to prime CRGO steel imported during last 12 months, which was followed by a couple of reminders. However, the latter has not yet complied with the request.
Scrap grade CRGO is available at just half of what prime steel would cost. No wonder transformer manufacturers using costly but high-quality and long-lasting CRGO steel find themselves at the receiving end of the government’s failure to check import of scrap grade material as they find the playing field heavily tilted in favour of unscrupulous players.
They are upset that despite being the nodal agency, BIS has not taken any step to fight this menace which encourages greedy companies to manufacture low-quality transformers that would not last more than 3-4 years although the normal life of such equipment is deemed to be more than 25 years. Apart from distorting market competition, poor-quality transformers lead to inflated equipment bills for utilities and also expand their carbon footprint. (KNN/NM)
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