Ministry of Steel Revised Domestically Manufactured Iron & Steel Products Policy

The Ministry of Steel, Government of India, has introduced the Revised Domestically Manufactured Iron & Steel Products Policy-2025 (DMI&SP Policy-2025) to promote self-reliance and prioritize domestically manufactured iron and steel products in government procurement. This policy supersedes the earlier version and aims to strengthen the domestic steel industry, reduce dependency on imports, and incentivize indigenous technology adoption. Below, we delve into the key aspects of this policy and its implications for stakeholders.

Key Objectives of the Policy The DMI&SP Policy-2025 is designed to:

Provide preference to domestically manufactured iron and steel products in government procurement.
Promote indigenous technology in the iron and steel sector.
Encourage domestic value addition and reduce reliance on imported capital goods.
Ensure fair competition and compliance with procurement guidelines.

Scope and Applicability The policy applies to:

All Ministries, Departments, and agencies under the administrative control of the Government of India.
Projects funded by these entities, including Central Sector Schemes and Centrally Sponsored Schemes.
Public sector steel manufacturers and private agencies fulfilling EPC contracts for government projects.
Procurement contracts exceeding Rs. 5 lakhs for iron and steel products listed in Appendix-A.

Additionally, the policy prohibits Global Tender Enquiries (GTE) for procurement of iron and steel products and capital goods below Rs. 200 crores, except with approval from the Department of Expenditure.

Definitions and Key Terms The policy introduces several important definitions:

Domestically Manufactured Iron & Steel Products (DMI&SP): Products manufactured by entities registered in India, including SEZs.
Domestic Value Addition: The percentage of value added in India, calculated as the total value of the item minus the value of imported content.
Margin of Purchase Preference: Domestic suppliers can quote prices up to 20% higher than the lowest bid (L1) for certain items.
Indigenous Technology: Technology developed and owned by Indian entities with at least 51% equity held by Indian residents.

Exclusions and Waivers

The Ministry of Steel may grant waivers for government procurements under specific conditions:

If certain grades of steel are not manufactured domestically.
If domestic sources cannot meet the required quantities.

Exemption requests must be submitted to the Standing Committee with sufficient proof of unavailability.

Role of the Standing Committee

A Standing Committee chaired by the Secretary (Steel) oversees the implementation of the policy. Its responsibilities include:

Monitoring compliance and issuing clarifications.
Reviewing and updating the list of products and domestic content requirements.
Addressing grievances and resolving disputes.
Taking action against non-compliance by procurement entities.

Promotion of Indigenous Technologies

Appendix-C of the policy focuses on promoting indigenous technologies in the iron and steel sector. It incentivizes Central Public Sector Enterprises (CPSEs) to adopt and scale up indigenous technologies. Eligibility criteria for technology providers include demonstrable engineering experience, vendor tie-ups, and intellectual property rights.

Appendices: A Comprehensive Framework The policy includes three appendices:

Appendix-A: Lists iron and steel products that must be procured from domestic sources, along with their HS codes and conditions.
Appendix-B: Provides an indicative list of capital goods that can be imported for manufacturing iron and steel products, along with minimum domestic content requirements.
Appendix-C: Outlines directives for promoting indigenous technologies in steel manufacturing.

Implementation and Monitoring

The Ministry of Steel is the nodal agency for monitoring the policy’s implementation. Procuring agencies must submit quarterly compliance reports, and the policy provisions are applicable for five years, with the possibility of extension.

Impact on Stakeholders

Domestic Manufacturers: The policy provides a significant boost to domestic manufacturers by ensuring preference in government procurement.
Technology Providers: Indigenous technology suppliers are incentivized to innovate and scale up their solutions.
Government Agencies: The policy ensures transparency and adherence to procurement guidelines.
Private Sector: EPC contractors and private agencies working on government projects must comply with the policy’s domestic sourcing requirements.

Conclusion

The Revised Domestically Manufactured Iron & Steel Products Policy-2025 is a landmark initiative to strengthen India’s steel industry and promote self-reliance. By prioritizing domestic manufacturing and indigenous technologies, the policy aligns with the government’s vision of “Atmanirbhar Bharat” (Self-Reliant India). It not only supports local businesses but also fosters innovation and sustainability in the iron and steel sector.

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Source: Ministry of Steel

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