Japan Raises Alarm Over Delayed Steel Imports in India Amid Customs Hurdles
The Japanese Embassy in India raised concerns with the Ministry of Steel and the Ministry of Commerce and Industry. Japanese steel shipments are stuck at Indian ports due to missing No Objection Certificates (NOCs). Takashi Ariyoshi, Chargé d’Affaires ad interim at the embassy, stated that these NOCs are usually issued after Quality Control Committee meetings. However, those meetings have been suspended since September 2024, halting NOC issuance.
Ariyoshi noted that Japanese companies face high detention charges while shipments remain at ports. He said that if no action is taken, steel imports from Japan will stop. Indian importers reported that their steel containers have been held up for almost two months. This situation aligns with pressure from major Indian steel companies advocating for limits on imports, which they claim hurt their profits. In contrast, micro, small, and medium enterprises (MSMEs) argue against these restrictions, citing the high cost of domestic steel.
Traders have contacted the Department for Promotion of Industry and Internal Trade (DPIIT) and the Ministry of Steel for help. However, importers still do not receive NOCs, even for items not produced competitively in India. Concerns are rising about detention costs, especially for smaller traders who are losing money due to delays. The Commerce Ministry referred the issue to the Steel Ministry.
Experts say the delays and bureaucratic issues are harming India’s steel-consuming industries. The government’s Steel Import Monitoring System (SIMS) requires detailed advance declarations, while Quality Control Orders (QCOs) mandate certain steel products to be registered with the Bureau of Indian Standards (BIS).
How are Indian steel producers responding to the issues surrounding Japanese steel imports?
News Directory 3: Exclusive Interview with Takashi Ariyoshi, Chargé d’Affaires ad interim at the Japanese Embassy in India
Date: October 15, 2023
By: [Your Name], Senior News Editor
In a significant development affecting international trade relations, the Japanese Embassy in India has raised urgent concerns regarding the stoppage of steel shipments at Indian ports due to missing No Objection Certificates (NOCs). To discuss this issue further, we sat down with Takashi Ariyoshi, Chargé d’Affaires ad interim at the Japanese Embassy in India.
News Directory 3: Thank you for taking the time to speak with us today, Mr. Ariyoshi. Can you explain the current situation with Japanese steel shipments to India?
Takashi Ariyoshi: Thank you for having me. The situation we find ourselves in is indeed concerning. We have been informed that Japanese steel shipments are currently stuck at Indian ports because the NOCs needed for clearance have not been issued. These certificates are typically granted following meetings of the Quality Control Committee, which unfortunately have been suspended since September 2024. As a result, our shipments are now facing significant delays.
News Directory 3: What impact is this having on Japanese companies and trade relations?
Takashi Ariyoshi: The impact is substantial. Japanese companies are incurring high detention charges while their goods remain idle at the ports. This could lead to a halt in steel imports from Japan altogether if no action is taken to resolve this issue swiftly.
News Directory 3: Can you provide us with more context regarding the delay in the NOC issuance?
Takashi Ariyoshi: Certainly. NOCs are critical for ensuring that shipments comply with Indian standards. The suspension of the Quality Control Committee meetings is directly impacting our ability to receive these certifications. It is crucial that the government addresses this matter so that we can resume smooth trade operations.
News Directory 3: There have been reports of tensions between major Indian steel companies and Japanese exporters regarding imports. Can you elaborate on those dynamics?
Takashi Ariyoshi: Yes, it appears there is considerable pressure from major Indian steel producers who are advocating for limits on imports, arguing that they affect their profitability. However, we also hear from micro, small, and medium enterprises (MSMEs) that argue against these restrictions. They emphasize that the domestic cost of steel is quite high, and access to imported steel is essential for their survival.
News Directory 3: Has there been any response from the Indian government or relevant departments regarding these issues?
Takashi Ariyoshi: Traders and importers have reached out to the Department for Promotion of Industry and Internal Trade (DPIIT) to express their concerns. However, we are still waiting for a formal response or resolution that would allow for the issuance of the NOCs and the release of our shipments.
News Directory 3: What message would you like to convey to Indian authorities and stakeholders to resolve this situation?
Takashi Ariyoshi: We urge the Indian authorities to prioritize the resumption of the Quality Control Committee meetings and facilitate the issuance of NOCs. We believe that fostering a collaborative environment in trade is beneficial for both nations. Japan and India have strong economic ties, and it is in our mutual interest to ensure a smooth flow of trade to support industries and jobs on both sides.
News Directory 3: Thank you, Mr. Ariyoshi, for your insights and for shedding light on this important issue.
Takashi Ariyoshi: Thank you for having me. We appreciate your efforts to highlight these matters.
As the situation develops, it becomes crucial for stakeholders on both sides to negotiate a resolution that balances industry needs while maintaining healthy trade relations. We will continue to monitor the situation closely and provide updates as they become available.
Authorities have demanded BIS NOCs for items not covered by the QCOs, causing confusion and delays. These delays further raise costs, as BIS often takes time to issue NOCs. Technical glitches with SIMS have also slowed clearances.
While policies protecting domestic steelmakers are well-meaning, they can burden industries that rely on imported steel. Data for India’s steel trade in FY24 shows a trade deficit for core steel despite exceeding exports for steel products. Core steel exports totaled $11.9 billion, while imports reached $18.6 billion, resulting in a significant deficit in that sector.
In contrast, steel product exports amounted to $9.9 billion, surpassing imports of $5.1 billion. Overall, India exported $21.8 billion worth of steel and steel products, while imports were $23.7 billion, revealing challenges in the core steel segment. Exports of core steel decreased slightly from $12.1 billion in FY21 to $11.9 billion in FY24, reflecting struggles against cheaper imports and limited domestic production of high-quality steel. Meanwhile, core steel imports soared from $8.3 billion in FY21 to $18.6 billion in FY24, mainly for flat-rolled and specialty steels used in advanced industries like defense and aerospace.