Policy

Covid-19 supplies: Govt eases local content norm for procurement till September 30

Our Bureau New Delhi | Updated on May 14, 2021

Public procurements are often riddled with large-scale corruption and inefficiency. To bring in transparency, efficiency and speed in public procurement, which accounts for 20 per cent of the country’s GDP, the Commerce Ministry launched the Government e-Marketplace (GeM) in 2017.

The Department of Pharmaceuticals (DoP) said for formulations that are not manufactured in India, the minimum local content shall be 10 per cent in 2018-19   -  File photo

The relaxation will apply till Sept 30

For efficient sourcing of Covid-related goods and services, the government has relaxed the local content norm of public procurement till September 30.

An order issued by the Department for Promotion of Industry and Internal Trade (DPIIT) has put on hold the applicability of the Public Procurement (Preference to Make in India) Order, 2017 and all related amendments,  which means there is no need to prefer companies whose goods and services have 50 per cent or more local content.

“….the administrative Department undertaking the procurement (including procurement by any entity under its: administrative control) may exempt the procurement of supplies required for containment of Covid-19 global pandemic from the applicability of this order/any provision thereof, after written approval of Secretary of the Department concerned or any other Authority having been assigned power by the Secretary of the Department concerned. The aforesaid exemption. shall be applicable only till September 30, 2021,” the latest DPIIT order issued on Thursday stated.

Curbs stay

This relaxation, however, does not say if it dilutes the restrictions imposed last year on bidders from countries sharing a land border with India, including China. These curbs were imposed on grounds of defence of India or matters related to national security.

On June 4 last year, the government modified the Public Procurement Order, 2017 to give top preference to companies whose goods and services had 50 per cent (classified as Class 1 local supplier) or more local content followed by those whose domestic value-addition was between 20 per cent and 49 per cent (Class 2 local supplier). This was aimed at promoting ‘Make in India’.

The order was further amended on September 16, 2020, allowing Departments and Ministries to mandate local content of more than 50 per cent and 20 per cent for Class 1 and 2 local suppliers, respectively. It also kept out entities of countries that had not allowed Indian companies to bid for their government contracts.

“While the DPIIT order notified on May 13 temporarily waives the preference given to Class 1 and Class 2 local suppliers in public procurement, it is not clear whether the restrictions on countries disallowing Indian companies from participating in their government procurement bidding have also been relaxed,” a Commerce and Industry Ministry official told BusinessLine.

Published on May 14, 2021

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