India's Directorate General of Foreign Trade has delisted 15 agencies that certify imported metal scrap, after finding they issued certificates without proper checks. Importers say cargo is now stuck at ports and costs are rising.
At a glance
- The agencies issued large numbers of certificates from a single instrument across several countries without due diligence.
- Customs is rejecting certificates from delisted agencies, so some importers paid penalties and fresh inspection fees to release cargo.
- India imports about 13 million tonnes of metal scrap a year, and ports handle roughly 2,500 scrap containers daily.
Background
Every shipment of metal scrap entering India needs a pre-shipment inspection certificate (PSIC). It confirms the scrap carries no radioactive material, arms, ammunition or explosives. Only agencies recognised by the Directorate General of Foreign Trade (DGFT) can issue one. Scrap from the US, UK, Canada, New Zealand, Australia and the EU can instead use supplier certificates under set conditions.
What happened
The DGFT has withdrawn recognition from 15 pre-shipment inspection agencies (PSIAs) after a review of the certificates they issued. The review found the agencies had issued a large number of certificates from a single instrument across different countries without due diligence.
Certificates from those agencies are no longer accepted by Customs. Some importers have had to pay penalties and have their consignments inspected again by local agencies before the cargo was released.
Why it matters
The inspection rule exists for safety, and a certificate issued without a real inspection defeats its purpose. Agencies that misdeclare face penal action under the Foreign Trade (Development and Regulation) Act, 1992.
The crackdown has hit a large and busy trade. India imports about 13 million tonnes of metal scrap a year, and about 2,500 scrap containers move through its ports every day. Importers report stranded cargo, logistics bottlenecks and extra inspection costs.
What it means for India
The pain falls mostly on the secondary steel industry, the induction furnaces and mini mills that melt scrap instead of making steel from ore. Higher clearance costs and delays raise their raw material bill at a time when coal and other inputs are already expensive.
The DGFT says it has recognised additional agencies so that inspection capacity stays adequate and trade is not disrupted. Importers face a second pressure from Europe as well, where draft EU rules would stop metal scrap exports to India from 2027.
Our read
Outlook: neutral. The delays raise costs for Indian scrap users but do not change global scrap supply. Any price effect is likely limited to local scrap premiums while the backlog clears.
What to watch
- How quickly the newly recognised inspection agencies clear the backlog of scrap containers at Indian ports.
- Any DGFT relief for consignments shipped with certificates issued before the delisting.
- Progress on the EU's draft rules that would bar European scrap exports to India from 2027.
For information only, not investment advice.
Iron price in India
metalscost.com India reference price as of 2026-10-03.
Detailed analysis
Timeline
- 2026-09-25: Importers flag port delays and penalties after the DGFT delists 15 pre-shipment inspection agencies.
Supply Drivers
Stranded containers slow the flow of about 13 million tonnes a year of imported scrap to Indian mills.
Government Policies
The DGFT's crackdown on faulty inspection certificates has tightened clearance of imported metal scrap.
Trade Tariffs
Draft EU rules to stop scrap exports to India from 2027 add a second threat to imported feed.
What could lift prices
- Delays at ports could lift local scrap premiums while the backlog lasts.
- Tighter scrap imports increase demand for domestic iron ore and sponge iron.
What could weigh on prices
- New agencies recognised by the DGFT could clear the backlog quickly.
- Scrap from safe countries can still use supplier certificates, limiting the disruption.
Country impact
| Country | Impact | Reason |
|---|---|---|
| India | Medium | Scrap importers face stranded cargo, penalties and extra inspection costs at ports. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Steel Manufacturing | Negative | Secondary steelmakers that melt scrap face higher raw material costs and delays. |
| Recycling | Negative | Scrap traders and importers are paying penalties and fresh inspection fees. |
Who gains, who loses
- Newly recognised inspection agencies: They gain business as importers move away from the 15 delisted agencies.
- Metal scrap importers: Their cargo is stuck at ports and they face penalties and extra inspection costs.
Other ways this could play out
- If the DGFT allows a transition period, cargo certified before the delisting could clear without penalties.
- If backlogs persist, secondary steelmakers could turn to domestic scrap or sponge iron.
Price risks
- A prolonged backlog could push up local scrap and sponge iron prices.
- A quick fix by the DGFT would leave prices largely unaffected.
Technical view
Price is mixed relative to its 20-period and 50-period moving averages, showing no clear trend alignment.
Computed from metalscost.com's own stored price history.
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