(The Gist of PIB) Amendments in Public Procurement (Preference to Make in India) Order, 2017
(THE GIST OF PIB) Amendments in Public Procurement (Preference to Make in India) Order, 2017
Amendments in Public Procurement (Preference to Make in India) Order, 2017
With this, the government aims to encourage Make in India and to promote manufacturing and production of goods and services in India.
Public Procurement (Preference to Make in India) Order, 2017 will provide maximum preference in public procurement to companies whose goods and services have more local content.
Local content means the amount of value added in India, which shall be the total value of the item procured (excluding net domestic indirect taxes) minus the value of imported content in the item (including all customs duty) as a proportion of the total value, in per cent.
Earlier in June, revised Public Procurement Order 2017, introduced a concept of Class-I, II and non-local suppliers.
Class-I local supplier means a supplier or service provider, whose goods, services or works offered for procurement, has local content equal to or more than 50%.
For Class-II supplier domestic value addition is between 20% but less than 50%. Class-I local suppliers will get the most preference in all government purchases.
New procurement rules:
Public Procurement (Preference to Make in India) Order, 2017, amended, enabling nodal Ministries/Departments to notify higher minimum local content requirement for Class-I and Class-II local suppliers.
Earlier, minimum local content requirement for Class-I and Class- II local suppliers was fixed at 50% and 20%, respectively.
All administrative ministries/departments, whose procurement exceeds Rs. 1,000 crore per annum, to notify their procurement projections for the next five years.
An upper threshold value of procurement to be notified, beyond which foreign companies shall enter into a joint venture with an Indian company to participate in government tenders.