BIS Has Conceded, So Why Isn't the Indian Stainless Steel Market Accepting It?

The Indian stainless steel market is caught in an awkward paradox: the door to regulation has been opened, but the market door remains firmly shut.

In an effort to boost the market, the Bureau of Indian Standards (BIS) relaxed import restrictions last month and even introduced a temporary exemption policy allowing non-BIS certified materials to enter India until December 31. The policy had an immediate effect, with import volumes rebounding quickly. However, this "shot in the arm" has failed to awaken sluggish domestic demand, and the recovery scene anticipated by all market participants has turned out to be an illusion.

Weak Downstream Demand, Surging Imports Become a Burden

The root cause of the market's weakness lies in the lack of uptake from end consumers. Major stainless steel purchasers such as the construction, automotive, and consumer goods industries have not increased their procurement as expected. Scarce downstream orders have led to pessimistic sentiment throughout the industrial chain.

Already high inventories, coupled with newly arrived imported resources, have created a severe supply glut. Traders and local steel mills are forced to sell at lower prices to maintain cash flow, squeezing profit margins to the limit.

Steel Mills Criticize Temporary Policy, Call for Fair Environment

Adding to the dissatisfaction of domestic Indian stainless steel producers is the BIS temporary exemption policy. This policy allows the free import of non-BIS certified materials until December 31, 2025, which they believe creates "unfair competition."

Currently, all eyes are on the government's next move after the temporary exemption policy expires at the end of the year. The industry consensus is that a real recovery depends on whether end demand can substantially pick up, which is closely linked to the overall performance of the macroeconomy.

The BIS "concessions" have not proven to be a master key to solving the market's predicament. Now that the tactic of "opening up imports" has failed, figuring out how to genuinely "stimulate demand" has become the most urgent test facing the Indian government and the stainless steel industry.