India amends its steel policy to boost domestic industry over imports

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The government has amended the policy that provides preference to domestically-manufactured iron & steel products (DMI&SP) over imports in government procurement. By this change, the policy has widened its applicability to every project where the procurement value of iron and steel is above Rs 5 lakh, against Rs 25 crore earlier.

The steel ministry also said in a gazette notification that buyers must ensure that procurement is not split for the purpose of avoiding the provisions of this policy. The amended policy will not apply to any tender or procurement for which notice inviting tender or other form of procurement solicitation has been already issued.

Apart from promoting the use of domestically-manufactured steel in government projects, the amendment will also encourage local manufacturing.

Launched in 2017, the DMI&SP policy has till December 2020 led to import substitution of more than Rs 21,000 crore worth of steel, which implies that more and more domestic steel is being used in government procurement. Domestic steel has been defined as one which has been manufactured in India and having local content ranging from 20-50%.

The government notification said, “All central sector schemes (CS) / centrally-sponsored schemes (CSS), for which procurement is made by states and local bodies, would come within the purview of this policy, if that project / scheme is fully / partly funded by the government.”

Earlier, the policy was applicable to all projects funded by ministry or department of the government and all agencies or entities under their administrative control for purchase of iron & steel products. The amended policy shall not apply for purchase of iron and steel products with a view to commercial resale or with a view to use in the production of goods for commercial sale, the notification said.

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