India reiterates iron and steel products policy, sharpens domestic sourcing norms

The Indian steel ministry reiterated its preference for domestically manufactured iron and steel products in government procurement in an updated Domestically Manufactured Iron & Steel Products policy, 2025, published in the Gazette of India on Dec. 17.

The notification supersedes the version issued on May 26, 2025, largely retaining the existing framework while introducing targeted clarifications and refinements, in line with the government's broader push to curb import dependence and support local producers.

While a wide range of flat and long steel products used in government-funded projects will continue to be preferentially sourced from domestic manufacturers, the ministry has strengthened the "melt and pour" requirement by explicitly designating India as the country where steel must be melted and cast, thereby clarifying a condition that previously existed but lacked a specific geographic definition.

The revision introduces greater differentiation for certain downstream and fabricated steel products, such as pipes, tubes, structures and containers, the update showed. Unlike the previous approach, which broadly applied the melt-and-pour criterion, these products will now be eligible under specified minimum domestic value-addition norms.

The domestic value addition requirement refers to the policy stipulation that a specified percentage of the final value of an iron or steel product must result from manufacturing, processing or assembly activities conducted within India, according to the ministry.

The scope of the policy remains unchanged, continuing to cover all central government ministries, departments, public sector undertakings and government-funded projects, including centrally sponsored schemes implemented by states and local bodies. It also applies to private contractors executing engineering, procurement and construction contracts for government agencies.

The updated policy applies to contracts where the total value of iron and steel procurement exceeds Rupees 500,000 ($5,573) on an itemized basis, which is unchanged from the earlier version.

Procurement restrictions

India reaffirmed its procurement norms, which restrict global tender inquiries for iron and steel products, as well as capital goods used in steel manufacturing, for contracts valued up to Rupees 2 billion, unless prior approval is obtained from the competent authority, according to the ministry.

The country will continue to permit imports of capital equipment for iron and steel manufacturing, with domestic suppliers eligible for a purchase preference margin of up to 20% -- the percentage advantage granted to domestic suppliers over foreign bidders in government procurement, provided they meet specified content norms.

The updated policy elaborates and expands the indicative list of importable capital goods, including online ash analyzers and pellet cars, reflecting the government's intent to incentivize domestic manufacturing of specialized machinery and set clear benchmarks for local value addition.

Provisions allowing the ministry to grant waivers -- in cases where specific grades are not produced domestically or where domestic supply falls short -- remain intact, according to the update.

A standing committee chaired by the steel secretary will continue to oversee implementation, review exemption requests and monitor compliance, the ministry said.

The policy will remain in force for five years from the date of publication, with an option for extension, according to the ministry.

Platts, part of S&P Global Energy, assessed the spot cut-to-length price of IS2062, 2.5-10 mm thick hot-rolled coil, excluding 18% goods and services tax, at Rupees 46,700/mt ($523/mt) ex-works Mumbai on Dec. 19, up Rupees 400/mt day over day.