India has overhauled its procurement policy—the Domestically Manufactured Iron and Steel Products Policy-2025—to crack down on rising steel imports that have impacted the stability of the domestic market and threatened the survival of primary steel mills. The new policy provides for clear preference to domestic steel in government contracts, closing the doors to foreign competition with draconian procurement rules. A reciprocal clause bans suppliers from countries that bar Indian firms from their government tenders—a bold move to strengthen India’s self-reliance.With immediate effect, all government ministries, departments, and their attached agencies—including public sector undertakings (PSUs), societies, trusts, and statutory bodies—have been asked to give preference to iron and steel products manufactured in India. This includes flat-rolled steel, bars, rods, and railway materials. These materials must fulfill the condition of “melt and pour,” which means the steel must be melted and poured in its initial solid form in India. This will be beneficial for domestic manufacturers of the alloy.Industry sources say China remains one of the targeted countries under these revised procurement rules, while some efforts are being made to slow down imports from other Asian countries with which India has free trade agreements. Imports from China during April-February stood at 2.4 million tonnes, down 5 percent over last year, while imports from Korea and Japan stood at 2.7 million tonnes and 1.92 million tonnes, up 7 and 70 percent, respectively, over last year. Total imports stood at 8.9 million tonnes, up 16 percent over last year, while exports stood at 4.4 million tonnes, down 34 percent over last year. India was a net importer.The government remains the major buyer of steel in India and uses it in the infra, rail, and defense sectors, with at least 25-30 percent of the country’s finished steel production going to these sectors. The new policy explicitly bans global tender enquiries (GTEs) for iron and steel products and limits such enquiries to capital goods valued up to Rs 200 crore, unless approved by the Department of Expenditure. The ban is aimed at protecting domestic manufacturers from foreign competition in government contracts.The policy incorporates a reciprocal clause, according to which, entities from countries that bar Indian companies from participating in their government procurement will be barred from bidding for steel-related items in India, unless explicitly permitted by the ministry.”This measure underlines India’s intent to protect its industry amid global trade tensions,” an official said. Finished steel production (excluding JSPL) declined to 65.4 million tonnes from 65.7 million tonnes last year. Total production stood at 133 million tonnes, up just 5 percent from 126.5 million tonnes a year ago.Finished steel production of large private players like JSW and Tata remained almost stagnant, growing by less than two percent year-on-year. In the case of JSW, the 11-month production was 21.4 million tonnes, while for Tata it was 20 million tonnes. For AMNS India, it fell by nearly 2 percent to 6.7 million tonnes. In the case of PSU majors like SAIL and RINL, the reduction was in the range of 3-16 percent, or 14.4 million tonnes and 2.8 million tonnes, respectively, data accessed by BusinessLine showed. The share of small steel producers in total production increased to 45 percent (60.4 million tonnes).Talking on this topic, Anradha Singh, a political analyst at Blue Kraft, said, “The scheme, announced on the eve of the new financial year, will be applicable for five years, which can be extended further. This policy, issued by the Ministry of Steel, replaces the earlier policy and aims to enhance self-reliance by supporting Indian manufacturers in the competitive global market. The policy applies to purchase contracts above Rs 5 lakh and also to projects funded by the Central Government, including Central Sector Schemes and Centrally Sponsored Schemes implemented by states and local bodies.”
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