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The Prime Minister Mr Manmohan Singh has constituted a committee to suggest ways for adopting the global best practices in government procurements that run into thousands of crores of rupees.
“(The committee will) come up with suggestions which would bring rules, regulations and procedures... in terms of adopting best practices around the globe,” Joint Secretary in the Commerce Ministry Mr Amar Sinha told a FICCI-IIFT function here.
India is not a member of the WTO on government procurements and has recently taken the “observer” status in the multilateral pact which sets common rules and procedures for the state procurements.
The ‘observer’ status would give India an insight into how governments of developed countries place multi-billion procurement orders with the industry.
The global state procurements are estimated at a huge $ 1.6 trillion and are a big attraction for the multi-lateral corporations.
The government procurements constitute about 10-15 per cent of the global economy, according to the estimates of the World Trade Organisation (WTO). India’s public procurement is estimated at about Rs 8 lakh crore (about $ 150 billion).
Developed countries, most of which are members of GPA, wants India to sign the Government Procurement Agreement (GPA) under the WTO.
“We have become an observer, we do not have a time line when we will become a member,” Mr Sinha said.
Speaking on the occasion, WTO’s Chairman of Committee on Government Procurement Mr Nisholas Niggli said a signatory of GPA would be shielded from preferential trade policies of other countries.
“There are opportunity costs for non-participation in GPA in terms of foreign trade opportunities...,” Mr Robert Anderson from WTO Secretariat said.
Citing examples Anderson said it would also protect a country from protectionist measures like the USA’s “Buy American” clause which was not applicable to suppliers from GPA member countries.
“GPA explicitly guarantees non-discriminatory treatment,” he added.
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