Importing Metal Scrap Into India: PSIC, DGFT Rules and the Radiation Certificate Problem

Updated: October 21, 2026 · 17 min read

A single radioactive container of Turkish steel scrap sitting at Nhava Sheva can freeze an importer’s entire pending clearance queue, trigger an AERB notification, and hand Customs the authority to order re-export — all before the importer has had a chance to file a Bill of Entry. That is not a theoretical risk. CBIC data from FY 2024-25 recorded multiple radiation-alert incidents at major Indian ports, resulting in re-export instructions and port storage penalties that ran into tens of lakhs per affected consignment. If you are importing metal scrap into India — or planning to — understanding the metal scrap import India rules in their current form is not optional. This guide covers every layer: PSIC requirements, DGFT policy classification, radiation screening obligations, port procedures, and the penalty exposure that most traders discover only after the fact.

Why Metal Scrap Imports Are Under Tighter Scrutiny in 2026

India imported approximately 7–8 million metric tonnes of ferrous and non-ferrous scrap annually in recent years, making it one of the world’s largest scrap-consuming nations. The Ministry of Steel has publicly backed scrap imports as a lever to feed the country’s electric arc furnace (EAF) capacity, which accounts for roughly 35% of domestic steel output. But that commercial appetite has repeatedly collided with contamination incidents — radioactive cobalt-60 sources embedded in scrap, explosive ordnance fragments in demolished military equipment, and toxic residues in copper and aluminium consignments.

The regulatory response has been cumulative rather than a single dramatic reform. The Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016 (as amended in 2024) tightened the definition of “hazardous characteristic” for imported waste streams. The Foreign Trade Policy (FTP) 2023–2028, notified by DGFT in April 2023 and updated through subsequent Public Notices, revised the category classifications for several HS codes covering metal scrap. And in FY 2025-26, CBIC issued revised Standard Operating Procedures for Customs formations at the 11 designated ports authorised to handle scrap imports, mandating upgraded radiation portal monitor (RPM) installations. Together, these changes mean the compliance burden on importers in FY 2026-27 is materially higher than it was three years ago.

For domestic recyclers and traders sourcing feedstock internationally — a common practice when domestic scrap supply tightens and the spread between imported scrap and finished steel justifies the logistics — the practical question is which documents you need, in what sequence, and what happens when something goes wrong. Our metal scrap recycling services team works with importers on the domestic processing side of this chain, and the compliance gaps we see most often are upstream — at the pre-shipment and port-clearance stages.

The PSIC Requirement: What It Is, Who Issues It and What It Must Cover

The Pre-Shipment Inspection Certificate (PSIC) is the foundational document for any metal scrap import into India. DGFT’s policy — codified through successive Public Notices under the FTP — makes PSIC mandatory for all ferrous scrap (HS Chapter 72), non-ferrous scrap (HS Chapter 74, 75, 76, 78, 79, 80), and mixed metal scrap consignments. The certificate must be obtained before the vessel sails from the origin port. A post-shipment inspection does not satisfy this requirement and will typically result in the Bill of Entry being queried or rejected by Customs.

Who Can Issue a PSIC?

DGFT maintains an approved list of Pre-Shipment Inspection Agencies (PSIAs). As of 2026, the recognised agencies include internationally accredited names such as Bureau Veritas, SGS, Intertek, TÜV SÜD, and CCIC (China Certification & Inspection Group for China-origin shipments). Crucially, the approving authority is DGFT — not BIS or CPCB — and traders must verify that the agency they engage is on the current DGFT-approved list, which is updated periodically via Public Notice. Using an agency whose approval has lapsed is a common and costly error.

What the PSIC Must Document

The certificate is not a simple quality inspection report. DGFT’s requirements specify that a valid PSIC must confirm: (a) the grade and composition of the scrap against the declared HS code; (b) the absence of radioactive material, as verified by radiation survey equipment calibrated to IAEA or equivalent standards; (c) the absence of explosive or military ordnance; (d) the absence of sealed or partially sealed containers that could conceal hazardous substances; and (e) that the consignment does not constitute “waste” under the Basel Convention Annex definitions that India has incorporated into its domestic rules. A PSIC that omits the radiation clearance statement will be treated as incomplete by Customs.

DGFT Scrap Import Policy Under FTP 2023–2028: Free, Restricted and Prohibited Categories

The Foreign Trade Policy 2023–2028 is the governing framework for import classification. Under this policy, metal scrap falls into one of three categories: ‘Free’ (importable without a licence), ‘Restricted’ (requires a specific import licence from DGFT), or ‘Prohibited’ (cannot be imported under any circumstances). The classification is HS-code-specific and is not static — DGFT updates it through Public Notices that traders are expected to track independently.

As of FY 2026-27, the broad position is as follows. Ferrous scrap under HS 7204 (in specified grades such as HMS 1&2, shredded scrap, and cast iron scrap) is generally in the ‘Free’ category, subject to PSIC compliance. Non-ferrous scrap — copper (HS 7404), aluminium (HS 7602), zinc (HS 7902) — is similarly ‘Free’ for specified grades meeting purity and contamination thresholds. However, mixed or unsorted scrap under these same headings, and any scrap that cannot be grade-certified, falls into ‘Restricted’. Importing restricted scrap without a licence is a violation of the Foreign Trade (Development and Regulation) Act, 1992 and attracts penalties under Section 11 of that Act, including fines up to five times the CIF value of the consignment.

One recurring compliance problem is misclassification at the time of shipment booking. An exporter in the UAE or the UK may describe a consignment as “HMS 1” (which is ‘Free’), but if the PSIC inspection reveals it contains more than the permissible 0.5% non-metallics or mixed grades, the classification shifts. The importer — not the exporter — carries the liability at the Indian port. This asymmetry is why PSIC review by an independent Indian customs consultant before the shipment departs is becoming standard practice among serious traders.

Metal Scrap Import Classification and Key Parameters (FY 2026-27)

Scrap Type	HS Code (Chapter)	FTP Category	PSIC Required?	Key Restriction / Note
Ferrous scrap (HMS 1&2, shredded)	7204	Free	Yes	Non-metallics ≤ 0.5%; radiation clearance mandatory
Ferrous scrap (mixed / unsorted)	7204 (mixed grades)	Restricted	Yes	Import licence from DGFT required in addition to PSIC
Copper scrap (specified grades)	7404	Free	Yes	Purity thresholds apply; PSIC must confirm grade
Aluminium scrap (specified grades)	7602	Free	Yes	Radiation clearance + composition certificate required
Zinc / Lead scrap	7902 / 7802	Free / Restricted (grade-dependent)	Yes	Lead scrap subject to additional CPCB hazardous waste rules
Scrap containing radioactive material	Any	Prohibited	N/A	Re-export mandatory; AERB notified automatically

The Radiation Certificate Problem: AERB Protocols and What Happens When a Container Fails

The radiation screening requirement is where most compliance discussions in the scrap trade become uncomfortably concrete. The Atomic Energy Regulatory Board (AERB), which operates under the Atomic Energy Act, 1962, has issued directives that require all metal scrap consignments to be scanned using Radiation Portal Monitors (RPMs) at designated ports before Customs Out of Charge (OOC) is granted. India has installed RPM infrastructure at 11 designated scrap-import ports, which include Nhava Sheva (JNPT), Mundra, Chennai, Pipavav, and Vizag, among others.

What “Radiation Clearance” in the PSIC Actually Means

The PSIC’s radiation clearance statement certifies that the consignment was surveyed at the origin using calibrated instruments and no readings above 1 microsievert per hour (µSv/h) above background were detected. This is the internationally accepted threshold. However — and this is the critical gap — origin-country inspection and Indian port RPM scanning use different equipment sensitivities and different background baselines. A consignment that passed a cursory visual and survey inspection at Rotterdam or Dubai may still trigger an RPM alert at Mundra. The PSIC clearance does not guarantee port clearance.

What Happens When a Container Triggers an Alert

The sequence, once an RPM alert is triggered, is swift and largely outside the importer’s control. Customs notifies AERB within 24 hours. The container is moved to an isolation bay. AERB’s regional officers — or a BARC-empanelled radiation safety officer — conduct a detailed survey. If radioactive material is confirmed, the importer receives a formal show-cause notice and, in most documented cases, an order directing re-export at the importer’s expense within a specified period (typically 30 days). Demurrage and detention charges at Indian ports, which can run to ₹80,000–₹1.5 lakh per container per week at major terminals, begin accruing immediately. If the importer cannot arrange re-export, AERB coordinates with the exporting country’s nuclear authority under bilateral protocols — a process that can take months.

Beyond the immediate financial hit, the importer’s IEC (Importer Exporter Code) may be flagged by DGFT, complicating future clearances. The exporting agency that issued the PSIC also faces scrutiny, though DGFT’s recourse against foreign agencies is limited in practice.

Port Procedures at Nhava Sheva, Mundra and Chennai: A Step-by-Step Flow

Understanding the documentary and physical sequence at port is essential for any importer managing timelines against vessel arrival and storage windows. The process is broadly consistent across the 11 designated ports, with minor variations in local Customs formation practices.

Before the vessel arrives, the importer’s Customs House Agent (CHA) files the Import General Manifest (IGM) electronically through ICEGATE. The Bill of Entry is filed simultaneously, with the PSIC number and issuing agency cited in the declaration. Customs’ automated risk-selectivity system assigns a processing lane — Green (auto-clearance), Yellow (document verification), or Red (physical examination). Scrap consignments are almost universally assigned Yellow or Red owing to the commodity’s inherent risk profile.

Physical examination includes container opening under Customs supervision, visual grading assessment, and mandatory RPM scanning. If the consignment also involves non-ferrous scrap categories that are notified under the Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016 (lead scrap, for instance, is specifically scheduled), an additional No Objection Certificate (NOC) from MoEFCC or its designated authority may be required. Importers who miss this requirement and clear the container before obtaining the NOC are in direct violation of Rule 13 of those Rules, which governs transboundary movement of hazardous waste.

Once physical examination is complete and the RPM scan is clear, Customs issues the Out of Charge (OOC) order. The importer can then lift the container to the designated processing facility. Critically, the processing facility must be capable of receiving the declared scrap type — a melting furnace with valid environmental consent, a shredding plant with valid Consent to Operate, or a CPCB-authorised recycler for specialised streams. Moving scrap to an unauthorised facility after port clearance is a separate compliance exposure under the Ministry of Environment, Forest and Climate Change rules.

Penalties, Re-Export Orders and the Hazardous Waste Rules Exposure

The penalty architecture for non-compliant metal scrap imports draws from at least three regulatory instruments, and the exposures stack — they are not alternative remedies.

Under the Foreign Trade (Development and Regulation) Act, 1992, importing restricted scrap without a licence can attract a fine of up to five times the CIF value of the goods, or ₹10 lakh, whichever is higher. At current scrap prices — ferrous scrap (HMS 1&2) was trading at approximately USD 340–360 per metric tonne (CIF India) in mid-2026 — a 500-tonne consignment carries a CIF value of roughly ₹14–15 crore. Five times that figure is a theoretical maximum exposure of ₹70–75 crore, though actual adjudication orders are typically far lower. The point is that the ceiling is not trivial.

Under the Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016, penalties for import of prohibited or non-notified hazardous waste streams can reach ₹5 lakh per consignment under Schedule IV of those Rules, in addition to mandatory re-export and cost recovery. The 2024 amendment to these Rules strengthened the enforcement mechanism by requiring that re-export costs be recovered from the importer’s bank guarantee, which DGFT now requires for importers with prior contamination notices on record.

The Customs Act, 1962 adds a third layer: misdeclaration of goods (e.g., declaring mixed scrap as HMS 1) is subject to confiscation and a fine equal to the market value of the goods. Detention and demurrage at JNPT can add ₹60,000–₹1.2 lakh per container per week after the free period expires. For a 20-container shipment held for six weeks, that is ₹72 lakh to ₹1.44 crore in port charges alone — before any regulatory fine.

The 8-Point Compliance Checklist for Every Metal Scrap Import in FY 2026-27

Given the layered risk, the following checklist represents the minimum that a diligent importer’s team should complete before, during, and after each consignment. This is not an exhaustive legal opinion — engage a licensed customs consultant or legal adviser for case-specific advice.

1. Verify the HS code and FTP category before booking the shipment. Confirm the grade against the current DGFT ‘Free’ list under FTP 2023–2028 and check for any recent Public Notices that may have reclassified the code. Do not rely on the exporter’s classification alone.
2. Engage a DGFT-approved Pre-Shipment Inspection Agency (PSIA) at the origin port. Confirm the agency’s approval status on the current DGFT list. Ensure the PSIC will explicitly cover radiation survey, explosive ordnance clearance, and grade certification.
3. Obtain the radiation clearance statement as a separate section within the PSIC, citing the instrument used, calibration date, and readings in µSv/h. A generic “no radioactive material” declaration without instrument data is increasingly rejected by Customs at Red-lane examination.
4. Check whether the scrap type requires an MoEFCC NOC under the Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016. Lead scrap, certain copper alloy scrap, and any stream on the hazardous waste schedule requires this clearance before the Bill of Entry can be processed.
5. File the Bill of Entry on ICEGATE with all document references complete — PSIC number, issuing agency, NOC reference (where applicable), and IEC details. Incomplete declarations trigger manual intervention and extend port dwell time.
6. Pre-identify the domestic processing facility and confirm it holds valid Consent to Operate from the relevant State Pollution Control Board (SPCB). In Maharashtra, this means MPCB; in Gujarat, GPCB. Moving scrap to a facility without valid consent after OOC exposes the importer to a secondary violation.
7. Maintain all import documents — PSIC, NOC, Bill of Entry, OOC, weighment slips — for a minimum of five years, consistent with Customs Act record-retention obligations. DGFT audits of scrap importers have increased in frequency since FY 2024-25.
8. Report any radiation alert or Customs query to your legal counsel within 48 hours. The show-cause timelines under the Customs Act and the Hazardous Waste Rules are short, and missing a response deadline can convert a manageable query into a default finding.

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Frequently Asked Questions

Is a PSIC mandatory for all metal scrap imports into India, or only for certain categories?

A PSIC is mandatory for all metal scrap imports under DGFT’s Foreign Trade Policy 2023–2028, regardless of whether the scrap is classified as ‘Free’ or ‘Restricted’. The certificate must be obtained before the vessel sails from the origin port. There is no exemption for small consignments or for scrap originating from countries with bilateral trade agreements. Using a DGFT-approved Pre-Shipment Inspection Agency is a condition of valid clearance, not a discretionary step.

What happens if a scrap container triggers a radiation alert at an Indian port?

Under AERB protocols and CBIC standing instructions, the container is immediately isolated. AERB is notified within 24 hours. A detailed radiation survey is conducted by a BARC-empanelled officer. If radioactive material is confirmed, the importer receives a show-cause notice and, typically, an order to re-export the container at the importer’s cost within 30 days. Port demurrage continues to accrue during this period, often reaching ₹80,000–₹1.5 lakh per container per week at major terminals such as JNPT or Mundra.

Which metal scrap types require an MoEFCC No Objection Certificate (NOC) in addition to a PSIC?

Under the Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016, scrap streams that are scheduled as hazardous — including lead scrap, certain copper alloy scrap, and mixed battery scrap — require an NOC from MoEFCC or its designated authority before the Bill of Entry can be processed. Importing these streams without the NOC is a direct violation of Rule 13 of those Rules and attracts both a penalty of up to ₹5 lakh per consignment and mandatory re-export.

Can mixed or unsorted scrap be imported into India without a licence?

No. Under the Foreign Trade Policy 2023–2028, mixed or unsorted metal scrap that cannot be certified to a specific grade falls under the ‘Restricted’ category. Importing it without a valid import licence from DGFT constitutes a violation of the Foreign Trade (Development and Regulation) Act, 1992, with penalties of up to five times the CIF value of the goods, or ₹10 lakh, whichever is higher. Grade certification by the PSIC agency at origin is the mechanism that establishes ‘Free’ category eligibility.

How long must an importer retain scrap import documentation?

Under the Customs Act, 1962, importers are required to retain all import-related records — including the PSIC, Bill of Entry, Out of Charge order, and associated shipping documents — for a minimum of five years from the date of assessment. DGFT may also call for records during trade policy audits. In practice, given the increased frequency of DGFT and Customs post-clearance audits on scrap importers since FY 2024-25, maintaining digital copies in an organised, retrievable format is strongly advisable for the full five-year period.

Work With The National Recycling Corporation

Importing metal scrap into India is one side of the compliance equation. The domestic side — receiving, processing, and certifying what arrives — carries its own obligations, and a misstep at the processing stage can negate the care taken at the import stage. The National Recycling Corporation works with importers, aggregators, and industrial consumers across Mumbai, Thane, Gujarat, and the Delhi-NCR corridor to ensure that imported scrap is processed through authorised, environmentally compliant facilities with full documentation trails.

Our processing partners hold valid Consent to Operate from the relevant SPCBs (MPCB in Maharashtra, GPCB in Gujarat) and are equipped to issue certificates of recycling and processing certificates that satisfy BRSR reporting requirements and ESG auditor queries. Every transaction is GST-compliant, with tax invoices issued against correct HSN codes — a detail that matters enormously when your accounts team reconciles the import duty paid against the domestic processing cost. We price metal scrap fairly against prevailing market rates, referenced to London Metal Exchange (LME) benchmarks for non-ferrous grades.

If you are sourcing imported scrap and need a reliable domestic partner for the processing and documentation chain, or if you have questions about which SPCB approvals your processing facility needs, contact us through our website. You can also explore our full range of scrap categories we purchase or learn more about our ferrous and non-ferrous metal recycling services for importers and industrial generators alike.

• Pan-India pickup and logistics coordination from port to processing facility
• SPCB-authorised processing partners in Maharashtra and Gujarat
• GST-compliant invoicing against correct HS/HSN codes
• Certificates of recycling and processing suitable for BRSR sustainability disclosures
• Fair-market pricing for metal scrap indexed to LME for non-ferrous grades
• Documentation support for Customs post-clearance audit queries

Sources and References

• Directorate General of Foreign Trade (DGFT) — Foreign Trade Policy 2023–2028 and Public Notices on scrap import classification
• Ministry of Environment, Forest and Climate Change — Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016 (as amended)
• Central Pollution Control Board — Hazardous Waste Management portal and Rule schedules
• Ministry of Steel, Government of India — Scrap-based steelmaking policy and EAF capacity data
• Atomic Energy Regulatory Board (AERB) — Radiation Portal Monitor directives and scrap import protocols
• Central Board of Indirect Taxes and Customs (CBIC) — Standard Operating Procedures for scrap imports at designated ports
• London Metal Exchange (LME) — Non-ferrous metal benchmark prices
• NITI Aayog — Circular economy and scrap utilisation policy framework