To boost ‘Make in India’, Centre flags unfair tender norms

Advisory identifies over a dozen conditions commonly introduced in tender conditions that went against the local suppliers

The Railway Ministry has directed General Managers of all rail zones to make sure that all procuring agencies across the network complied with the Public Procurement (Preference to Make in India) order. File | Photo Credit: The Hindu

The Union Government has flagged over a dozen “restrictive and discriminatory” conditions which prevented local suppliers from participating in the bidding process. The tweaking of the tender conditions was in violation of the Public Procurement (Preference to Make in India) Order, 2017, issued to protect the interests of local suppliers. 

Last week, the Ministry of Railways directed General Managers of all Zonal Railways and Production Units to make sure that all procuring agencies across the railway network complied with the PPP-MII Order and avoid including any “restrictive and discriminatory” conditions against the local suppliers. 

The communication follows the latest guidelines issued by the Department of Promotion of Industry and Internal Trade, Ministry of Commerce and Industry on December 20, 2022, which highlighted some of the common examples of “restrictive and discriminatory” conditions against local suppliers and some other eligibility norms that were non-compliant to the PPP-MII Order. 

The DPIIT in consultation with the Department of Expenditure and the Government e-Marketplace (GeM) had identified over a dozen conditions commonly introduced in tender conditions that went against the local suppliers but suited the interests of foreign manufacturers and issued an advisory. 

Foreign standards 

For instance, the advisory said that foreign technical standards like minus 25-degree temperature compatibility for certain equipment procured for airports were incorporated to eliminate ‘Make in India’ products without any justification of requirement of that specification value for intended end use of the equipment/service.

Among other tweaked tender norms were standard certification by foreign agencies without specifying any equivalent Indian certification or alternative in the procurement of medical and electronic devices. 

Excessive turnover requirement as a pre-qualifying criteria, not commensurate with the financial capacity required for executing the contract, insisting on specific experience of supplying products to other nations such as export to G8 countries, additional requirement of bank guarantee and delayed payment terms were among other conditions that prevented the local manufacturers from taking part in the procurement process.

Global brands 

Another criteria which was observed in the procurement of IT, electronic and electrical products was specifying foreign brands either for finished products or for part of scope of work. The report explained that while CISCO, NEC, Alcatel, Siemens products were specified in telecom products, HP, Dell, Lenovo were insisted on IT products. In the purchase of lifts, the tender conditions specified use of OTIS, Mitsubishi, Schindler, Kone and Johnson products.

The advisory noted that stipulating in the bid conditions that the particular goods/works/service category was exempted from the provisions of the PPP-MII order since the concerned nodal ministry had not issued any notification for the same was another condition that made the bid non-compliant with the procurement rules. It also clarified that the PPP-MII Order applied to purchase of all categories of goods/works/services exceeding ₹5 lakh in value.

The PPP-MII Order of 2017 was issued to promote domestic value addition in public procurement. The policy provided for purchase preference to domestic manufacturers and service providers who complied with local content requirements in public procurement activities over entities merely importing to trade or assemble items.