The new steel policy introduced by the Indian government has a clear purpose: to reduce reliance on imported steel and enhance the promotion of domestically manufactured steel products in government procurement. This initiative is crucial for fostering local industries and ensuring sustainable economic growth.
The steel policy applies to all central government ministries, departments, public sector undertakings (PSUs), and specific funded projects where the total steel expenditure exceeds ₹5 lakh. Compliance is mandatory to ensure that government contracts favor local production.
Domestic value addition refers to the proportion of Indian-made value in a product, quantified as a percentage of the item's entire value. This measure is critical for determining eligibility for government contracts under the new policy.
The policy provides significant support to local manufacturers by ensuring a 20% purchase preference for domestic suppliers. Additionally, it imposes a local content requirement, compelling contractors to source a specific percentage of their materials from Indian producers.
A diverse range of products is included under this policy. These encompass flat and long steel, bars, rods, wires, tubes, pipes, castings, forgings, and railway components, among others. This broad coverage aims to stimulate various sectors of the steel industry.
Under the new policy, global tenders are restricted for projects with costs up to ₹200 crore. Any foreign bids will require special approval, ensuring that local suppliers have a competitive advantage in the procurement process.
Manufacturers are required to certify the local content of their products using a standardized format. This process of self-certification is vital for maintaining transparency, and penalties will be enforced for any false claims made by suppliers.
The policy emphasizes the necessity for indigenous technology. Suppliers must demonstrate that 75% of the engineering staff is Indian and that they possess 100% intellectual property rights for critical technology used in new products. This requirement aims to bolster local innovation.
To monitor compliance with the steel policy, a Standing Committee has been established. This committee will oversee disputes, manage exemptions, and ensure the overall implementation of the policy across various sectors.
Q1. What is the main goal of India's new steel policy?
Answer: The primary goal is to reduce dependency on imported steel and promote the use of domestically manufactured steel products in government procurement.
Q2. Who needs to adhere to the steel policy?
Answer: The policy must be followed by all central government ministries, departments, PSUs, and funded projects where steel costs exceed ₹5 lakh.
Q3. What does 'domestic value addition' mean in this context?
Answer: It refers to the percentage of Indian-made value in a product, which is crucial for eligibility under the policy.
Q4. How does the policy benefit local manufacturers?
Answer: The policy ensures a 20% purchase preference for domestic suppliers and mandates local content requirements, enhancing competitiveness.
Q5. What kind of products are included under this policy?
Answer: It covers a wide range, including flat and long steel, bars, rods, pipes, and railway components, promoting various sectors.
Question 1: What is the primary aim of India's new steel policy?
A) To increase steel imports
B) To promote domestic steel production
C) To reduce government spending
D) To eliminate public sector undertakings
Correct Answer: B
Question 2: Which entities are required to comply with the new steel policy?
A) Only private companies
B) Central government ministries and PSUs
C) State governments only
D) Foreign manufacturers
Correct Answer: B
Question 3: What is meant by 'domestic value addition' in the steel policy?
A) Imported steel value
B) Percentage of Indian-made value in a product
C) Total cost of production
D) Market price of steel
Correct Answer: B
Question 4: What purchase preference percentage is given to domestic suppliers?
A) 10%
B) 15%
C) 20%
D) 25%
Correct Answer: C
Question 5: What must manufacturers certify regarding their products?
A) Imported content
B) Local content
C) Market price
D) Production methods
Correct Answer: B
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