The Indian Union Cabinet approved a policy that provides a preference to procure iron and steel products from domestic manufacturers for projects of the government and its agencies.



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Policy for providing preference to domestically manufactured iron & steel products in government procurement

Official press release

Inception date: 03 May 2017 | Removal date: 28 May 2019

Public procurement localisation

The "Policy for providing preference to domestically manufactured iron & steel products in government procurement" was implemented on 3 May 2017. It establishes preferred procurement access for iron and steel products that satisfy a 15% minimum domestic value addition requirement. The requirement only concerns tenders for such products with a tender value exceeding INR 50 crore (appx. USD 7.8 million as on 12 May 2017). This requirement will be reviewed and adjusted according to the manufacturing capabilities of the industry.

Government procurement includes procurement by the Government of India, Public Sector Undertakings (PSUs), Societies, Trusts and Statutory bodies set by the government. The products procured by the government or its agencies can only be used for government projects and not for commercial resale directly or in any other form.

Only those iron and steel products for which at least one domestic manufacturer exists are covered under this policy. A committee of experts from the industry and the ministry will be set up to review and monitor the implementation of the policy. A waiver can be granted to a project from the requirement to source locally in case the specific grade of steel required is not manufactured in the country or in case the quantity demanded cannot be met through domestic sources. In case the government agencies are procuring iron and steel products not covered by the policy, they are required to notify the specifications of these products to the above committee

The products included in this policy are:

  1. Ductile iron pipe
  2. Wire rod & TMT bar
  3. Structural/sections
  4. Hot Rolled coils, strips, sheets & plates
  5. Hot Rolled universal/Quarto Plates
  6. Cot Rolled coils/strips
  7. Coated flat steel products/GP/GC sheets/AI-Zn coated
  8. Colour coated, painted sheets
  9. All kinds of steel pipes and tubes
  10. Seamless tubes & pipes
  11. Rails

This policy has been updated as of 29 May 2019 (see related State Act).