A New Rule for Public Steel UseThe Ministry of Steel has officially implemented the 'Melt and Pour' condition for all steel used in government-funded projects. As per the notification, only steel that is melted and poured within India will qualify as domestically manufactured. This rule aims to strengthen the domestic steel industry, reduce reliance on imported steel, and ensure full traceability of the steel used in major infrastructure and public sector undertakings

Understanding the 'Melt & Pour' ClauseThe 'Melt and Pour' clause defines domestic steel not just by its place of finishing or rolling but by the entire process, from melting raw materials to pouring molten steel into final forms, being done within Indian borders. This means that foreign-origin steel, even if finished in India, will no longer qualify for use in public works. It tightens earlier domestic content norms and brings clarity to sourcing standards for projects funded by government agencies.

Implications for Foreign SuppliersThis change has a significant impact on foreign steel exporters, particularly those from China, South Korea and Vietnam, who often send semi-finished steel to India for further processing. With the 'Melt and Pour' rule, such products will no longer qualify as local under public procurement rules. It may lead to a decline in certain imports, while encouraging foreign companies to invest in melting facilities within India if they want access to the government market.

Boost for Indian Steel IndustryThe Indian steel industry, led by major players like Steel Authority of India Ltd, Tata Steel and JSW Steel, stands to benefit from this mandate. These companies already operate full-cycle production facilities and will now have an exclusive edge in supplying steel to major infrastructure projects like bridges, railways, power plants and highways. This could translate into increased capacity utilization and potentially, higher revenues.

Tracing Quality & ComplianceOfficials highlight that one of the major advantages of the 'Melt and Pour' rule is traceability. Since steel quality is directly linked to its melting process, ensuring it happens within India allows for better quality checks and documentation. This traceability is vital in safety-critical infrastructure projects such as metro systems, dams and high-speed rail networks, where structural integrity cannot be compromised.

Alignment with ‘Make in India’ VisionThe notification aligns closely with the government's ‘Make in India’ initiative, which encourages local manufacturing and value addition. By mandating the full production process within the country, the rule enhances domestic manufacturing capabilities. It is also expected to support employment in the steel and allied sectors, particularly in regions with major steel plants such as Odisha, Chhattisgarh and Jharkhand.

Flexibility for Defence & Critical Use CasesAlthough the rule is stringent, the government has allowed for certain exceptions in critical or strategic cases, such as defence projects, where foreign technology or specific steel grades may be required. In such cases, exemptions may be granted on a case-by-case basis after due approval. This shows a balanced approach, supporting local industry while allowing flexibility for national interests.

Enforcement & Future OutlookThe rule is now in effect and will apply to all central government and PSU tenders involving steel. Project authorities will need to ensure that procurement complies with the new criteria. While it may cause short-term disruptions for contractors used to sourcing semi-finished foreign steel, the long-term effect is expected to be positive for Indian industry. The notification is being seen as part of a broader strategy to fortify India’s manufacturing sector and achieve self-reliance in critical materials.

Key Takeaways

• The 'Melt and Pour' rule mandates all steel used in government projects be fully produced in India.

• Domestic steel manufacturers like SAIL, Tata Steel and JSW Steel are expected to benefit.

• The rule supports the ‘Make in India’ initiative and ensures quality through traceability.