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.