The Steel Ministry constituted standing committee to implement the Policy on Preference for Domestically Manufactured Iron and Steel Products in government procurement has clarified that the Railways will have to comply with the domestic preference.

In its representations to the committee, Railways had said, “Rail as a product should not be included in the list of iron and steel products.”

According to an official statement, in its response the committee noted that even though rails are produced through a complex and specialised processes, they will have to meet certain specified quality and performance criteria.

The clarification said, “However, there could always be more than one manufacturer (indigenous or foreign) meeting the above criteria. Therefore, argument put forward on this ground for its exclusion…is untenable and therefore, not accepted by the committee.”

The Railways has also sought exclusion from the mandatory domestic sourcing on conditions of procurement that are stipulated by external funding agencies. The Standing Committee said, “Where conditions of procurement by external funding agencies are governed by existing contracts/agreement/MoUs, policy provision shall not apply.”

However, for all future agreements, the domestic sourcing policy provision shall be applicable unless waiver is taken from Standing Committee to deal with specific case.

In response to the query by ONGC seeking clarity on whether steel used in the offshore platforms will be covered under the domestic sourcing preference norms, the Standing Committee responded, “Any project which has an aggregate steel products of value ₹50 crore or more, shall be eligible under this policy.”

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