India has introduced new procurement rules aimed at protecting and promoting the domestic iron and steel industry. The move comes amid mounting concerns over a sharp surge in cheaper imports, particularly from China, South Korea, and Japan, which led to record-high steel imports in the last financial year.
New Steel Procurement Policy Comes Into Effect
As per a gazette notification issued on April 1, the new “Domestically Manufactured Iron And Steel Products Policy 2025” mandates all central government ministries, departments, and agencies to prioritise the procurement of locally produced iron and steel products. This policy, valid for five years and extendable at the discretion of the Ministry of Steel, aims to strengthen domestic capacity while reducing dependency on imported materials.
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According to the notification, specifying foreign certifications or imposing unreasonable technical specifications in tender documents will now be treated as discriminatory practices against local suppliers. The government intends to ensure a level playing field for Indian manufacturers and prevent restrictive conditions that benefit foreign producers.
Restrictions for Non-Reciprocating Countries
In a significant clause, the policy states that entities and governments that do not allow Indian manufacturers to participate in their procurement processes will also be barred from participating in Indian government tenders. This restriction, however, will not apply to steel grades not manufactured domestically or if Indian mills cannot meet the required quantity.
Response to Import Surge
The policy comes on the heels of recommendations from the Directorate General of Trade Remedies, which had earlier called for a temporary 12 per cent safeguard duty for 200 days on certain steel imports to protect domestic producers from “serious injury.”
The influx of low-cost steel imports over the past year has put pressure on Indian mills, pushing prices down and impacting profitability. Government data revealed that India’s finished steel imports from China, South Korea, and Japan touched record highs in the first ten months of the previous financial year ending March 31.
With this policy, the government aims to provide a more favourable procurement ecosystem for Indian steelmakers while aligning with the broader goal of strengthening self-reliance in core sectors.
