In a huge boost to the domestic steel industry, the union cabinet has approved a policy making procurement of India-made steel by government agencies nearly mandatory, a move which will not only reduce imports, but also boost sales of the likes of Tata Steel, SAIL, JSW Steel and others.
The Domestically Manufactured Iron & Steel Products (DM1&SP) policy, for providing preference to Swadeshi steel in government procurement, is in line with Prime Minister’s vision of “Make in India”. This will encourage domestic manufacturing and reduce the usage of low quality, low cost imported steel in government funded projects.
The policy is applicable on all government tenders where price bid is yet to be opened.
However, in cases where specific grades of steel are not manufactured in the country or the quantities as per the demand of the project cannot be met through domestic sources, government agencies can procure such material from outside the country.
According to a government note, DMI&SP policy provides a minimum value addition of 15% in notified steel products which are covered under preferential procurement. In order to provide flexibility, steel ministry may review specified steel products and the minimum value addition criterion. Around 20% of the steel consumed in India are by the government agencies.
“While implementing who shall provide the policy, it poses trust on each domestic manufacturer who shall provide self-certification to the procuring government agency declaring that the iron & steel products are domestically manufactured in terms of the domestic value addition prescribed,” an official note said.
It shall not normally be the responsibility of procuring agency to verify the correctness of the claim. In few cases, the onus of demonstrating the correctness-of the same shall be on the bidder when asked to do so.
The government will set up a grievance redressal committee set up under the steel ministry which will dispose of the complaint from the manufacturer within four weeks.
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