India Sets Quality Control Measures for Metal Sales Starting December 2023
India is gearing up to tighten its grip on the sale of low-quality aluminium, copper, and nickel, with new Quality Control (QC) measures set to take effect from December 2023. These measures have been introduced via QC orders sanctioned by the Ministry of Mines in a bid to regulate the quality of these crucial metals.
Earlier this year, in June, the Mines Ministry had laid out its plans to establish a Quality Control framework aimed at discouraging subpar metal imports. The objective behind this initiative is to standardize the sale of these metals, making it mandatory for sellers to adhere to the quality benchmarks set by the Bureau of Indian Standards (BIS).
In March of the same year, the central government had proposed the issuance of Quality Control orders specifically for aluminium, copper, and nickel. Draft orders pertaining to aluminium alloys and these metals were made available to the public for review and feedback, with the consultation period extending until the end of May.
It is important to note that copper, which accounts for roughly half of India’s metal demand, heavily relies on imports. Additionally, the entire nickel supply for the country is sourced from overseas. Furthermore, India currently imports over 40% of its aluminium consumption in the form of alloy scrap.
Commenting on the situation, Jayanta Roy, Senior Vice President at ICRA Limited, expressed his views, stating, “The proposed quality control order will result in the elimination of any substandard material imports. However, this could potentially lead to a shortage of raw materials for downstream producers, resulting in a short-term increase in product prices in the domestic market.”
Industry observers anticipate that the initial months following the implementation of these quality control orders may bring about supply disruptions and the formation of price alliances among companies holding QC certifications. As these orders encompass the sale of these vital metals, they are expected to effectively curtail the influx of counterfeit imports through rigorous quality control measures.
