Over the last five years, Tata Steel’s procurement from AA suppliers has grown nearly 3.5 times, rising from ₹66 crore in FY2020-21 to ₹230 crore in FY2024-25.
NEW DELHI: Tata Steel Limited reported a sharp rise in procurement from Affirmative Action (AA) suppliers, with the business volume increasing 52 per cent year-on-year to ₹230 crore in FY2024-25, underlining the company’s accelerating focus on inclusive growth through preferential procurement.
According to disclosures made in Tata Steel’s Integrated Report FY2024-25, the procurement from AA suppliers constituted 19 per cent of the company’s addressable procurement spend of ₹1,200 crore during the financial year. The development marks a significant step in embedding social inclusion into Tata Steel’s core supply chain operations.
Preferential Procurement Anchored in Affirmative Action Policy
Tata Steel follows a structured preferential procurement policy guided by its Affirmative Action Policy, aligned with the Tata Affirmative Action Programme (TAAP). The programme is based on three foundational principles—Social Equity, Equal Opportunity, and Inclusion—and aims to bring marginalised communities into mainstream economic activity.
The company said the policy ensures that suppliers from socially disadvantaged groups are provided systematic access to business opportunities, enabling them to participate as capable and competitive partners in the supply chain rather than as beneficiaries of welfare-driven initiatives.
Who Benefits from the Policy
Under the Affirmative Action framework, Tata Steel procures goods and services from suppliers led by:
- Scheduled Caste (SC) entrepreneurs
- Scheduled Tribe (ST) entrepreneurs
- Displaced persons, particularly those affected by land acquisition at the Kalinganagar steel plant in Odisha
This targeted sourcing strategy is aimed at ensuring that communities impacted by large industrial projects are integrated into the economic value chain.
85 AA Vendors Among Nearly 2,000 Local Partners
Tata Steel said that out of nearly 2,000 supply chain partners from local states, 85 vendors belong to the Affirmative Action and Displaced Person categories. The company noted that this approach has helped create positive differentiation in its supply chain while strengthening entrepreneurial capabilities among underserved communities.
The preferential procurement policy applies to Tata Steel Limited’s Indian operations and is not applicable to its overseas entities.
Shift from Symbolic Inclusion to Scale
Over the last five years, Tata Steel has steadily expanded both the number of AA suppliers and the value of business awarded to them, signalling a transition from symbolic inclusion to scale-driven economic empowerment.
The company said the sharp rise in FY2024-25 reflects a deeper institutional commitment to embedding inclusion within procurement decision-making processes.
ESG Transparency and Reporting
The AA procurement data has been disclosed under the Social and Relationship Capital section of Tata Steel’s Integrated Report FY2024-25, reinforcing the company’s focus on transparency, accountability, and ESG-aligned reporting.
As regulatory and investor scrutiny on ESG performance intensifies, Tata Steel’s preferential procurement framework positions the company as a frontrunner in linking business performance with social impact.
Affirmative Action (AA) Suppliers – Growth Trend
| Financial Year | Number of AA Suppliers (Nos.) | YoY Growth (%) | Business Volume from AA Suppliers (₹ Crore) | YoY Growth (%) |
| FY2020-21 | 71 | — | 66 | — |
| FY2021-22 | 71 | 0.0% | 69 | 4.5% |
| FY2022-23 | 75 | 5.6% | 112 | 62.3% |
| FY2023-24 | 85 | 13.3% | 151 | 34.8% |
| FY2024-25 | 83 | -2.4% | 230 | 52.3% |
Also Read: Tata Power Procures ₹115 Crore from Affirmative Action Business Associates
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