DPIIT amends Public Procurement Order of 2017 giving priority to bidders of government contracts using local content

Giving maximum preference to local companies whose goods and services have 50 per cent or more local content

In a move to make the country self-reliant through a ‘Aatma Nirbhar Bharat’ campaign and promote ‘Make in India’, the government has modified public procurement norms to give maximum preference to local companies whose goods and services have 50 per cent or more local content.

“AiMeD on behalf of the Indian Medical Devices industry welcomes this strategic move by the Govt. While there is still no price preference advantage for Global Tender but preference of quantity is now available to Class I local supplier with over 50 per cent domestic content and not to Class II local supplier with 20-50 per cent local content,” said Rajiv Nath, Forum Coordinator, AiMeD.

The Department for Promotion of Industry and & Internal Trade (DPIIT) has amended its Public Procurement (Preference to Make In India) Order of 2017 that gives priority to bidders of government contracts that use more local content. The revised order has introduced a concept of Class-I, II and non-local suppliers, based on which they will get preference in government purchases of goods and services. Class-I local suppliers will get the most preference in all government purchases because their domestic value local content addition is 50 per cent or more. They will be followed by Class-II suppliers, whose local content value addition range is more than 20 per cent but less than 50 per cent.

Companies with less than 20 per cent of domestic content in their goods or services will not be able to participate in most of the government tenders and they are categorised as ‘non-local suppliers’.

Nath said, “The good news is that below Rs 200 crore tender which is usually the case of most medical device tenders, only Indian manufacturers are eligible to participate (with at least 20 per cent domestic content) and if there is adequate capacity and competitiveness then the participation will be reserved for domestic manufacturers with over 50 per cent domestic content.  This is definitely a ‘Make in India’ enabler.”

“If there are not many Indian manufacturers then a global tender will need to be issued but only with permission of the Secretary. Key issue is Govt needs to ensure that concessional 20 per cent domestic value should be at least from assembly of Indian parts / materials not salaries & marketing overheads or India will start promoting pseudo manufacturing which like termites has been undermining the effort of sincere manufacturers. We want that these fence sitters actually manufacture in India instead of pretending to be one. GeM also needs to urgently list all manufacturers on the basis of domestic content:> 20 per cent ,> 50 per cent domestic content or as non local supplier to aid buyers and enable Make in India,” added Nath.

For verification of local content, the Class I and II suppliers shall be required to indicate percentage of local content and provide self-certification that the item offered meets the local content requirement norms. Concept of Class-I supplier has been introduced so that in cases where local suppliers are to be given the order, even within that group we should give first preference to the ones whose domestic value addition is significantly high.

The India Medical Devices industry is happy that now domestic will be preferred over foreigner wherever possible. Under the Public Procurement (Preference to Make in India) Order, it was envisaged that all central government departments, their attached or subordinate offices and autonomous bodies controlled by the Government of India should ensure that purchase preference will be given to domestic suppliers. India imports over 80 per cent of its requirements of medical devices worth over Rs 42,000 crore and the Institutional Govt sales are estimated to be over Rs 25,000 crore.