India Mandates Quality Norms for Copper Products, Drums, and Tin Containers to Boost Domestic Manufacturing
India has revised quality standards for nine specific copper products to limit subpar imports and stimulate domestic manufacturing. Manufacturing and renewable sector investors should consider the Quality Control Orders when engaging in business matchmaking and trade contract negotiations.
What’s in the quality control order?
In an effort to curb the import of sub-standard goods and promote domestic manufacturing, the Indian government has recently issued mandatory quality norms for copper products, drums, and tin containers. The Department for Promotion of Industry and Internal Trade (DPIIT) released two separate notifications on October 20, 2023: the Drums and Tins (Quality Control) Order, 2023, and the Copper Products (Quality Control) Order, 2023.
Under these new regulations, items falling under these two categories cannot be produced, sold, traded, imported, or stocked unless they bear the Bureau of Indian Standards (BIS) mark.
These quality control orders will be effective six months from the date of publication of the notification. This timeline allows businesses to prepare for compliance and adapt to the new standards.
DPIIT, in collaboration with the BIS and relevant stakeholders, has been actively identifying key products for Quality Control Orders (QCOs).
Previously, similar orders were issued for products like smart meters, welding rods and electrodes, cookware and utensils, fire extinguishers, electric ceiling fans, and domestic gas stoves, demonstrating the government’s commitment to raising the quality standards across various industries. This ongoing effort has led to the development of over 60 new QCOs, covering 318 product standards. By enforcing mandatory quality control orders, the government aims to reduce the influx of sub-standard imports, prevent unfair trade practices, and ensure the safety of consumers and the environment.
Additionally, the DPIIT is also pursuing various initiatives to promote quality awareness among both users and manufacturers. This includes the development of quality testing labs and product manuals, which collectively contribute to the development of a robust quality ecosystem within the country.
Copper market in India
Copper ranks as the third most extensively utilized industrial metal, following steel and aluminum. Although the demand for copper grown exponentially in India over the last five years, there has been no meaningful expansion in the country’s capacity to meet this demand.
Until FY 2017-18, India held the status of a net exporter of copper. However, the Sterlite Copper plant at Tuticorin, Tamil Nadu, was shut down by the government in May 2018 due to pollution concerns and public uproar around the plant. Till then the Vedanta-owned plant had been responsible for 40 percent of India’s domestic demand.
Ensuring high-quality products in the Indian market
Copper and its alloys are integral to various industries, including power generation, transmission, telecommunications, and electrical circuits. As a result, maintaining high-quality copper products with uncompromised purity is crucial. The nine specific copper products covered under this order encompass wire rods for electrical applications, solid drawn copper, copper tubes for condensers and heat exchangers, and wrought copper tubes for refrigeration and air-conditioning.
Drums and tins are essential for storing and transporting various hazardous substances, serving industries such as waste management, healthcare, and food services. Ensuring the quality of these containers is critical to prevent leakages, adulteration, and fire damage.
India’s copper consumption and import demand
In the fiscal year 2022-23, India’s copper imports experienced a notable 15 percent year-on-year increase, making India a net importer in this segment for the fifth consecutive year.
The surge in demand for copper can be attributed to the government’s ambitious infrastructure development projects, coupled with a robust revival of economic activities across various sectors, including real estate, consumer durables, electric vehicle production, and renewable energy generation. For example, generating 1 MW of power through solar photovoltaic and onshore wind technologies necessitates approximately 3,000 kg of copper, per industry estimates reported in Business Line. For offshore wind power generation, this requirement exceeds 8,000 kg of copper per MW. India seeks to achieve 500 GW of renewable energy capacity by 2030.
According to data from the Commerce Ministry, India imported a total of 275,341 tonnes of copper during FY23 and 238,694 tonnes in FY 2021-22. These import numbers cover both refined and finished copper items. Refined copper refers to the final product achieved after the removal of impurities from copper ore. Finished copper is copper that has undergone processing and transformed into its ultimate form, which includes products like wires, tubes, pipes, sheets, and more.
Support for small and micro industries – implementing the QCO order
To protect domestic small and micro industries and facilitate the ease of doing business, the DPIIT has offered relaxations in compliance timelines. Small industries receive an additional three months, while micro industries are granted an extra six months to adhere to the quality control orders.
Stringent consequences for violation
Violating the provisions of the BIS Act can result in penalties, including imprisonment of up to two years or fines starting from a minimum of INR 200,000 (US$2406.87) for the first offense. Subsequent offenses may incur fines of a minimum of INR 500,000 (US$6017.18), extending up to ten times the value of the goods or articles involved.
(With inputs from Melissa Cyrill.)
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