Govt. amends public procurement norms to increase minimum local content & reciprocity of participation in govt. procurement of other countries
September 21, 2020
In order to promote Make in India and curtail investments from adversarial neighbouring countries, the Government of India has amended the Public Procurement (Preference to Make in India) Order, 2017 on 16 September 2020. The amendments enable nodal Ministries/ Departments to notify a higher minimum local content requirement, i.e. more than 50%, and to increase the margin for purchase preference for Class-I and Class-II local suppliers from the extant 20% threshold.
Further, entities of countries which do not allow Indian companies to participate in their Government procurement for any item will not be allowed to participate in Government procurement in India for all items related to the nodal Ministry/ Department, except for the list of items specifically permitted by that Ministry/ Department.
The government has stated that the specifying of foreign certifications/ unreasonable technical specifications/ brands/ models in the bid document is a restrictive and discriminatory practice against local suppliers. Foreign certification, if required, shall be stipulated only with the approval of Secretary of the Department concerned.
All administrative Ministries/Departments whose procurement exceeds Rs. 1000 Crore per annum are mandated to notify their procurement projections for the next 5 years on their respective website. An upper threshold value of procurement beyond which foreign companies shall enter into a joint venture with an Indian company to participate in government tenders, shall also be notified.
To refer to the press release of the Ministry of Commerce & Industry, dated 18 September 2020, click here.
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