Modi Govt Approves Policy To 'Buy Indian' To Boost 'Make-In-India’

With a view to encourage Make-In-India-programme and giving preference to locally made goods and services, Prime Minister, Narendra Modi has cleared the govt’s own version of the U.S’s Buy American policy via a national government procurement policy.

The new policy captioned “Govt procurement preference to Make-In-India order, 2017”, cleared by the Union cabinet on 24 May 2017, is expected to give a considerable impetus to local manufacturing and services sectors, whereby creating employments. It will also encourage the capital & technology flow into domestic manufacturing and services. It also provides push towards manufacture of parts, components and sub-components of these items, in line with the ‘Make in India’ vision.

The national procurement policy entails purchases of at least Rs. 2.00 trillion a year and also covers government companies, autonomous bodies and entities under the control of government. The government has defined local Goods & Service as those where at least 50 percent of the value addition has been done in India.

Small purchases of less than Rs. 5,00,000 are exempted from the policy; procurement of goods & services worth Rs. 50.00 lakh or less, where the nodal ministry decides that there is adequate local capacity and local competition, can be made only from local suppliers.

For procurement of orders worth more than Rs. 50.00 lakh, or where there is inadequate local capacity or competition, local suppliers will get a 20 percent margin of purchase preference. It implies that the local supplier will be given a chance to match the lowest bid, if its own bid is not more than 20 percent higher.

A standing committee in the Deptt of Industrial Policy & Promotion will manage the implementation of this order and its impending issues, and make recommendation to nodal ministries and procuring companies.