New DMI&SP Amendment Mandates Domestic Capital-Goods Sourcing for Steel CPSEs

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Dated: 28.10.2026

New DMI&SP Amendment Mandates Domestic Capital-Goods Sourcing for Steel CPSEs

The Ministry of Steel has issued a further amendment to the Domestically Manufactured Iron & Steel Products (DMI&SP) Policy, strengthening the preference for steel made in India and tightening procurement requirements for steelmaking Central Public Sector Enterprises (CPSEs).

The notification, issued as G.S.R. 888(E), amends the policy originally notified on 17 December 2025 and previously revised on 7 August 2026. The latest changes affect product-origin requirements for specified steel categories and establish a domestic-only procurement rule for listed capital goods used by steelmaking CPSEs.

Key change: “Melt & Pour” replaces the 50% domestic value-addition criterion

For products covered under HS Codes 7304, 7305, 7306 and 7307, the policy replaces the condition of “50% Domestic Value Addition” with a “Melt & Pour” requirement.

These HS codes broadly cover important iron and steel products, including:

HS 7304: Seamless tubes, pipes and hollow profiles of iron or steel
HS 7305: Other tubes and pipes with circular cross-sections and external diameters exceeding 406.4 mm
HS 7306: Other tubes, pipes and hollow profiles of iron or steel
HS 7307: Tube or pipe fittings, such as couplings, elbows and sleeves

The substitution is significant because a value-addition threshold focuses on the proportion of domestic processing or input value. By contrast, a Melt & Pour requirement places emphasis on where the underlying steel is melted and poured. This is intended to ensure that products claimed as domestic have a stronger connection to Indian steelmaking rather than merely undergoing downstream processing or assembly in India.

Domestic sourcing mandate for steelmaking CPSE capital goods

The amendment also adds a new note to Appendix-B of the DMI&SP Policy. It requires steelmaking CPSEs to procure all capital goods listed in Appendix-B exclusively from domestic sources.

This requirement applies to capital goods used by these public-sector enterprises and reinforces the policy objective of supporting Indian manufacturers and equipment suppliers in the steel value chain.

Limited exception for imports

Imports are not completely prohibited. Where capital goods meeting the required technical specifications are unavailable in India, the relevant CPSE may seek permission to import them.

Such requests will be considered:

Case by case
By a Standing Committee constituted by the Ministry of Steel
Only where compliant domestic capital goods are not available for the required specifications

This framework makes domestic procurement the default position while retaining a controlled mechanism for imports when necessary for technical or operational reasons.

What remains unchanged

The notification states that all other provisions of the DMI&SP Policy, including its earlier amendments, continue without change. The update is therefore targeted rather than a wholesale rewrite of the policy.

Implications for industry

The amendment has practical implications for suppliers, procurement teams and steel-sector CPSEs:

Steel product suppliers in the covered HS categories will need to demonstrate compliance with the Melt & Pour condition rather than relying on a 50% domestic value-addition calculation.
Steelmaking CPSEs must prioritize Indian sources for Appendix-B capital goods in their procurement planning and tender processes.
Domestic manufacturers of steel products and capital equipment may benefit from stronger demand preference, provided they meet required quality and technical standards.
Import-dependent projects may face additional approval requirements where listed capital goods are proposed to be sourced overseas.

Policy direction

The amendment signals a more stringent approach to defining domestic steel content and a stronger push for localization in public-sector steel procurement. By adopting the Melt & Pour criterion for selected products and requiring domestic sourcing of listed capital goods, the Ministry is seeking to deepen domestic manufacturing participation across both steel production and the equipment supply chain.

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Source: Ministry of Steel

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