The Rise of Fake BIS Certifications and Its Impact on India’s Steel Industry
The steel industry in India has encountered a significant challenge with the increasing import of substandard steel from China and Southeast Asia. These imports, often labeled with fake Bureau of Indian Standards certificates, are entering the country unchecked, misleading consumers, and evading quality controls that are supposed to ensure public safety and integrity in construction materials. The issue, if left unchecked, could undermine the country's manufacturing sector and affect critical infrastructure projects.
In September 2024, Guangdong Runxin Industrial Investment, a Chinese manufacturer of stainless steel cold-rolled coils and sheets, raised an alarm with Indian Customs regarding the misuse of its BIS certificate. The company revealed that certain importers and Chinese exporters were using its certification to falsely label non-certified steel grades as BIS-approved products. These non-compliant steel products were entering India in place of the certified grades for which Runxin was authorized to export. In response, the company launched an online verification platform (www.runxinbis.com) to help customs authorities verify shipments before they are cleared for entry into India.
This fraudulent activity has significant consequences. It endangers the quality of steel used in construction, infrastructure, and manufacturing, posing a direct risk to public safety. The lack of regulatory checks on these imports not only harms domestic manufacturers but also undermines consumer trust in certified products.
The Challenges Faced by Indian Customs and Industry Regulators
Despite the efforts of companies like Guangdong Runxin, the issue persists due to gaps in the customs clearance process. The Bureau of Indian Standards is supposed to regulate the quality of products entering the Indian market, ensuring that only goods meeting the required standards are allowed for sale. However, substandard steel from unauthorized factories is still entering the market with counterfeit BIS labels, bypassing the necessary quality control mechanisms.
Another example of this issue involves Inox Hoah Binh Joint Stock Company, a Vietnamese firm that recently received a BIS license for a certain grade of stainless steel. However, the BIS certification for this particular grade has been fraudulently used by importers to clear cheaper, uncertified products sourced from unlicensed factories. These misrepresented goods enter India without proper verification, causing further complications.
Key Takeaways:
• Fake BIS certifications for steel products from China and Southeast Asia are entering India, posing a serious risk to product quality, public safety, and domestic manufacturers.
• Guangdong Runxin Industrial Investment, a Chinese company, has alerted Indian Customs about the misuse of its BIS certification to export non-certified steel grades.
• Substandard imports are being cleared using fraudulent BIS labels, putting consumers and infrastructure projects at risk.
• The issue extends to Vietnamese company Inox Hoah Binh, whose BIS certification for certain steel grades has been misused by importers to clear cheaper, uncertified goods.
• Industry experts and organizations like GTRI are calling for stricter regulations and enforcement to protect consumers and domestic manufacturers from the growing menace of substandard imports.
• Stronger verification processes, collaboration with industry experts, and severe penalties for fraudulent practices are essential to addressing this issue.
