Entities from countries where Indian suppliers are not allowed to participate or compete in bids for government procurement, may be restricted or excluded from public procurement tenders in India.
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Such a provision, relating to “reciprocity,” has been included in the Indian government’s new policy to encourage ‘Make in India’ by granting preference to local suppliers in public procurement.
“If a nodal ministry is satisfied that Indian suppliers of an item are not allowed to participate and/or compete in procurement by any foreign government, it may, if it deems appropriate, restrict or exclude bidders from that country from eligibility for procurement of that item and/or other items relating to the nodal ministry,” according to the Public Procurement (Preference to Make in India), Order 2017.
A five-member committee chaired by the Secretary in the Department of Industrial Policy and Promotion has been set up to oversee the implementation of the policy. The committee “may assess issues, if any, where it is felt that the manner of implementation of the order results in any restrictive practices, cartelisation or increase in public expenditure and suggest remedial measures.”
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The policy — approved by the Cabinet last month — is aimed at boosting domestic manufacturing and services, thereby creating employment and enhancing income, as well as to stimulate the flow of capital and technology into domestic manufacturing and services.
“As per the Order, the minimum local content shall ordinarily be 50%. The Nodal Ministry may prescribe a higher or lower percentage in respect of any particular item and may also prescribe the manner of calculation of local content. The margin of purchase preference shall be 20%,” according to an official statement.
The members of the standing committee include secretaries of commerce and electronics & IT, and joint secretaries of expenditure department and the DIPP. It will meet “as often as necessary, but not less than once in six months.”