The Government has expanded the list of manufacturing goods that will be subject to minimum localization requirements in public procurement. The decision was made based on the provisions of the Law “On Public Procurement” and appeals from Ukrainian manufacturers.
The localization requirement will apply to 25 new types of goods in the following categories:
From now on, when purchasing these goods through public procurement, customers will be required to demand that their cost include a local component. In 2025, this component must be at least 25%, and in 2026, 30%. The requirement will continue to increase by 5% each year until it reaches 40%.
This is the first expansion of the list since the launch of the localization policy. Previously, the requirement applied to the procurement of 103 types of goods, including rail transport, urban transport, municipal equipment, and energy equipment. The localization requirement will apply to purchases of UAH 200,000 or more.
“Ukraine has an extremely high level of import penetration in public procurement. Before the full-scale invasion, it was 38%, while the global average is less than 10%. We must overcome discrimination against Ukrainian manufacturers in Ukrainian public procurement. These are jobs for our citizens and tax revenues that we use to finance our defense forces. In wartime, this is also a matter of economic security,” said First Deputy Prime Minister and Minister of Economy of Ukraine Yulia Svyrydenko.
The localization requirement does not apply to goods produced in countries that are parties to the WTO Agreement on Government Procurement (GPA), including the EU, the US, Japan, South Korea, the UK, and others.
The resolution will take effect one month after its publication.
For reference
Localization in public procurement is a requirement for a minimum share of Ukrainian components in the cost of goods purchased under the Law on Public Procurement. Thanks to this, public funds are directed towards supporting national production, creating jobs, and developing industry.
The localization requirement is part of the “Made in Ukraine” policy for the development of Ukrainian manufacturers, initiated by the President of Ukraine. The policy aims to support Ukrainian production, attract investment in the real sector of the economy, and increase non-raw material exports. Key policy programs include: localization in public procurement, “Affordable Loans 5-7-9%,” grants for processing enterprises, compensation programs for the cost of Ukrainian agricultural and other equipment (25% and 15%), industrial parks, support for projects with significant investments, the “School Bus” program and eOselya, insurance against military risks, and others.
Source: https://me.gov.ua/
