Atmanirbhar Bharat: DHI notifies draft order on machinery items for public procurement preference

Amiti Sen New Delhi | Updated on August 18, 2020

India’s imports of machinery, nuclear reactors and boilers from China in 2019 were around $13.87 billion during 2019   -  THE HINDU

Draft on industrial boilers is in line with DPIIT’s orders issued in June on local procurement

In line with the government’s stated goal of boosting domestic manufacturing and promoting ‘Atmanirbhar Bharat’, the Department of Heavy Industries (DHI) has come up with a draft order notifying the list of items in the industrial boilers category with sufficient local capacities where domestic local producers have to must be given preference by public procurement agencies.

The draft, which has been circulated by the DHI to all Ministries and Departments and NITI Aayog, is in pursuance of the Public Procurement (Preference to Make in India) (PPP-MII) Order, 2017, last amended on June 4, 2020, by the Department for Promotion of Industry and Internal Trade (DPIIT) .

“Since India imports substantial quantities of industrial boilers, by promising domestic manufacturers preferred sourcing by government procurement agencies, the Centre wants to incentivise local production. Once the draft order circulated by the DHI specifying products with sufficient local capacity is formalised, public procurement agencies can start favouring local producers as envisaged in the DPIIT notification,” an official told BusinessLine.

India’s imports of machinery, nuclear reactors and boilers from China in 2019 were around $13.87 billion during 2019, according to the United Nations COMTRADE database on international trade.

“While the present draft order of the DHI only covers industrial boilers, separate orders will be issued for other products by the DHI and other Ministries and Departments,” the official said. Public procurement is purchase of goods and services by the public sector and accounts for over 25 per cent of India’s GDP.

The DPIIT’s public procurement preference order amended this June is comprehensive with an intention for giving preference to local suppliers and promoting manufacturing and production of goods and services in India across categories. The larger objective is to enhance income and employment.

The draft order framed by DHI for preferred local sourcing of boilers or steam generators will also be applicable for all Central Schemes/Central Sector Scheme (CSS) for which procurement is made by States and local bodies, if that project or scheme is fully or partly funded by the Government in respect of manufacturing the product, the draft stated.

Status of local capacity

It further clarified that the status of sufficient local capacity and competition, for procurement of industrial boilers by procuring entities, shall be in accordance with the DPIIT’s PPP-MII Order Notification.

As per the DPIIT, local suppliers, having local content of ‘equal to or more than 50 per cent’, will be the only ones eligible to bid for contracts that has a sufficient domestic capacity. It will be the nodal ministry that will notify goods and services with sufficient local capacity.

“Department of Heavy Industry, Ministry of Heavy Industries & Public Enterprises shall be the nodal agency to monitor implementation of the notification,” the draft said.

Published on August 18, 2020

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