Local Preference and Indigenization
I am writing In its efforts to attract foreign investment and boost the flow of capital and technology into domestic manufacturing, the government has adopted measures to give procurement preference to locally produced goods, services and works.
The Public Procurement (Preference to Make in India) Order, 2017 by Department of Promotion of Industry and Internal Trade(DPIIT) under Ministry of Commerce and Industry seeks to promote purchase of local goods & services including in works and turnkey projects.
The latest PPP-MII order dated 16th September,2020 issued by DPIIT now mandates purchase of goods & services only by Indian vendors/OEMs and the order is applicable on procurement of goods, services and works (including turnkey works) by Central Ministry/ Department, their attached/subordinate offices, autonomous bodies controlled by the Government of India and Government companies as defined in the Companies Act..
No Global Tender Enquiry (GTE) can be invited for tenders up to Rs. 200 Crore except in exceptional cases, wherein competent authority for relaxation is Secretary (Coordination), Cabinet Secretariat. .
Unless global bids are invited, only Class-I local suppliers (suppliers offering items with more than 50% local content) and Class-II local suppliers (suppliers offering items with 20- 50% local content) have been made eligible to bid.
In procurement of all goods, services or works in respect of which the Nodal Ministry / Department has
communicated that there is sufficient local capacity and local competition, only ‘Class-I local supplier’ shall be eligible to bid irrespective of purchase value. In all other purchases, Purchase preference is given to Class-I local suppliers over Class-II local suppliers and Non local suppliers.
As per the Order, restrictive and discriminatory clauses against domestic suppliers cannot be included in procurement by Central Government agencies.
Department of Expenditure (DoE) amended General Financial Rules (GFR 2017) by inserting Rule 144 (xi) in GFR 2017and issued the Order (Public Procurement No. 1) dated 23rd July, 2020 under these Rules, which mandate that bidder having beneficial ownership from countries which share a land border with India will be eligible to bid, only if the bidder is registered with the competent authority.
