Ministry : Ministry of Steel (Not Applicable)
Part II-Section 3-Sub-Section (i)
Subject : Extra Ordinary
Analysis of the Gazette Notification: Revised Policy on Preferential Procurement of Domestically Manufactured Iron & Steel Products (2025)
This notification, published under the Revised Domestically Manufactured Iron & Steel Products Policy—2025, outlines a comprehensive framework to prioritize Indian-made iron and steel goods in government procurement. The policy aims to boost domestic production, ensure fair competition, and reduce reliance on imports by offering price preferences to locally manufactured products.
Overview
The policy establishes a 20% price preference for domestically manufactured iron and steel products in government procurement, subject to specific conditions. It defines eligible products, sets out domestic content requirements, and mandates compliance through certification and monitoring mechanisms. The policy applies to all central government ministries, departments, public sector enterprises, and projects funded wholly or partly by the Government of India.
Key Points
- Price Preference: Domestic suppliers receive a 20% margin over the lowest tender price (L1) for eligible products listed in Appendix A (iron & steel products) and Appendix B (capital goods).
- Scope: Covers procurement of iron & steel products, capital goods, and technology from indigenous suppliers. Applies to both project and non-project procurement where contract value exceeds ₹5 lakh.
- Domestic Content Definition:
[ \text{Domestic Value Addition (\%)} = \frac{\text{Total value} - \text{Imported content (including customs duty)}}{\text{Total value}} \times 100 ] A minimum 51% domestic equity and control over core R&D and project execution are required to qualify as a “domestic manufacturer.” - Product Categories:
- Appendix A: Includes flat-rolled products, bars, rods, wires, tubes, rails, sheets, and stainless steel products.
- Appendix B: Lists capital goods such as mining equipment, coke oven batteries, blast furnace components, continuous casting machines, electric arc furnaces, ladle furnaces, and rolling mill machinery.
- Melt & Pour Requirement: Steel must be produced in India (country of melt and pour) to qualify.
- Certification: Suppliers must submit statutory auditor certification or cost accountant declarations confirming domestic value addition.
- Exclusions & Waivers: Waivers may be granted where specific steel grades or quantities are not domestically available. Requests must be submitted to the Standing Committee chaired by the Secretary (Steel).
- Monitoring & Compliance:
- Agencies must submit quarterly compliance reports.
- Preference is given only to Class-I listed items unless otherwise specified.
- Non-compliant suppliers may be debarred, and misleading declarations attract penalties.
Summary
The Revised Domestically Manufactured Iron & Steel Products Policy—2025 is a strategic initiative to strengthen India’s steel manufacturing ecosystem by incentivizing domestic production through preferential government procurement. With a clearly defined price preference, robust eligibility criteria, and stringent compliance monitoring, the policy aims to reduce import dependency, promote self-reliance, and ensure fair play in public procurement. Its implementation is expected to have a significant impact on the steel industry, encouraging capacity expansion, technological upgrades, and greater participation from Indian manufacturers in government projects.
