The New Economic Reality: The Imperative of Production Localization 2025–2026
The most resonant and complex regulatory mechanism introduced by the state in the field of public procurement was mandatory production localization. This protectionist measure is aimed at preserving and creating jobs domestically, supporting the processing industry, and increasing tax revenues. For manufacturers of metal solutions, compliance with these requirements has become a matter of access to public funding.
Expansion of the List of Goods and Value Thresholds
Starting from the second half of 2025, the localization architecture underwent radical changes. Resolution of the Cabinet of Ministers of Ukraine No. 782 dated July 2, 2025, approved an additional list of processing industry goods to which requirements for the degree of localization apply. On August 4, 2025, this updated list entered into force, and metal structures, pipes, engineering structures, elevators, and cables were directly included in it.
The key trigger for applying these requirements is the value threshold. Localization becomes mandatory if the cost of the goods (for example, pipes or metal structures) in the contract exceeds 200 thousand hryvnias. It is extremely important to understand that this rule applies not only to direct commodity supplies but also to complex contracting agreements (construction, reconstruction, road repairs) where metal products are transferred to the procuring entity’s ownership as an integral part of the completed works. In such cases, contractors are obliged to separate the cost of each type of localized product in the estimate documentation so that the procuring entity can verify compliance with the law.
Dynamics of Interest Rates: Requirements for 2026
According to the provisions of the Law on Public Procurement, the degree of production localization is an indicator of the local component in the specific weight of the cost of raw materials, materials, assemblies, aggregates, parts, and labor of domestic origin in the total cost of the goods. The state has provided for a gradual, annual increase in this percentage.
While in previous periods the requirements were relatively lenient, during procurements for 2026, procuring entities and participants must take into account the updated percentage. From January 1, 2026, the minimum level of localization increased to 30 percent. This means that a manufacturer of metal structures must document that at least 30% of the cost of its products is formed in Ukraine.
To justify the calculations and correctly apply the norms of legislation, the parties can use official clarifications and letters from the Ministry of Economy of Ukraine. At the same time, exceptions to the rules should be taken into account: localization requirements do not apply to contracts concluded before August 4, 2025, as well as to special procurements carried out by military procuring entities in accordance with the Cabinet of Ministers Resolution No. 1275. Given that the defense complex is one of the largest consumers of metallurgical products, this exception leaves a significant market segment open to wider competition.
Procedure for Registration and Updating Applications
For products to be admitted to public bidding, the manufacturer is obliged to include them in advance in the state list of goods with a confirmed degree of localization. The procedure is fully digitized and is carried out through the personal account on authorized electronic platforms.
The algorithm of actions for inclusion in the registry is as follows:
- Authorization and navigation: The manufacturer logs in to their electronic platform and goes to the manufacturers’ registry section.
- Creating an application: A new application is generated, into which up-to-date data about the product, cost calculation, and confirmation of the Ukrainian component (minimum 30% for 2026) are entered.
- Verification and confirmation: The system warns that after adding a product, the information cannot be edited. The user must carefully check the entered data.
- Draft generation: After confirmation, the system automatically generates a document “Application for inclusion in the list of goods with a confirmed degree of localization”, which is saved in draft status.
- Publication: For final inclusion of the product in the database, it is necessary to apply an electronic signature and click the “Sign and publish” button, after which the products appear in the “My goods” section.
It is important to note that in 2026, the requirements became more systematic. Manufacturers had to manage to update their localization applications by March 31, 2026. Companies that ignored this requirement automatically lost the status of a localized product, which led to disqualification in corresponding tenders. Therefore, regular auditing of one’s own positions in the “My applications” filter is a mandatory routine for sales managers.