Made in India Just Got Stricter

Imagine a steel beam headed for a government building site. Under the old rule, that beam could have started life as a semi-finished slab imported from abroad, rolled and finished at an Indian mill and still carry the label of a domestically manufactured product. From last month, that is no longer good enough for a long list of steel items used in public procurement.

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The Ministry of Steel recently notified this change that governs what government departments, railways, defence establishments and publicly funded projects must source from within India. For a wide set of products under HS codes 7301, 7302, 7303, and 7308 through 7326, structural steel, tanks and containers, wire, chains, tools, cookware and sanitaryware among them, the earlier requirement of 50 per cent Domestic Value Addition has been replaced with Melt and Pour.

Shift in Public Procurement
It asks a more basic question: where was the steel actually made and the point it turned from raw material into solid metal? Under the new standard, that first melting and casting step has to happen in an Indian furnace. This is not an isolated Indian idea. It borrows from an approach now gaining ground worldwide. The European Union’s revised steel regulation is bringing in its own melt-and-pour evidence requirement. Washington has applied a similar test to its steel tariffs for some time now. There is a shared concern among major economies that a product can pass through several borders before reaching a market, while the steel making itself, the most emissions-intensive and capacity-heavy part of the process, happens somewhere with looser rules.

Impact on Local Mills
For India’s own steel producers, particularly integrated players who run their own blast furnaces or electric arc units, this amendment offers welcome clarity. Government procurement is not a small market. Major infrastructure and public works like Railways, ports, highways, and defence programmes together account for a considerable share of steel demand, and a melt and pour rule effectively reserves a larger part of that demand for companies with real furnace capacity on Indian soil.

Businesses that built supply chains around importing semi-finished steel and adding value locally, will now need to either shift towards domestically melted steel or accept that they may no longer qualify for these specific procurement categories. That is a real transition cost, and it will likely take a few procurement cycles to settle.

It is also worth flagging what the ministry chose to leave untouched. Seamless tubes and larger welded pipes under HS codes 7304 to 7307, along with railway coaches, wagons, and rolling-stock parts under 8605 to 8607, remain under the 50 per cent domestic value addition This suggests a calibrated approach rather than a blanket policy shift. Taken together, the amendment nudges Indian procurement policy a step closer to how leading economies are now thinking about steel: not just where a product is finished, but where it was truly made.

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