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Lifts to computers: 4 of 10 Govt tenders can’t comply with Make in India rules
  • The Indian Express
  • |
  • Economics (Indian Economy)
  • |
  • 2025-01-13
  • DPIIT
  • Make-In-India

The article addresses challenges in enforcing the 2017 Make-In-India order for government procurement, highlighting widespread non-compliance with rules favoring domestic suppliers. Approximately 40% of high-value tenders were flagged for violations, often specifying foreign brands.

Enforcement Challenges of the 2017 Make-In-India Order in Government Procurement

The implementation of the 2017 Make-In-India order in government procurement faces numerous challenges. This order aims to prioritize domestic suppliers by prohibiting tenders that specify foreign brands or set eligibility conditions unfavorable to local firms. However, compliance has been inconsistent.

Key Findings on Non-Compliance

  • Over 40% of high-value tenders (worth Rs 64,000 crore) by government departments were marked "non-compliant" with the 2017 rules by the Department for Promotion of Industry and Internal Trade (DPIIT).
  • Foreign brands are often preferred for products like CCTV cameras, medical supplies, and desktop computers due to perceived superior economic and quality factors.
  • From October 2021 to February 2023, 936 out of 1,750 high-value tenders did not comply with the rules, valued at Rs 53,355 crore.

Tender Classification and Compliance

  • In 2020, tender classification was introduced, requiring local content of more than 50% for primary suppliers.
  • By November 2023, 1,502 out of 3,590 high-value tenders (42%) did not conform to the order, with 982 tenders omitting the provisions, 450 specifying foreign brands, and 152 having restrictive turnover requirements.

Departmental Compliance and Issues

  • Some departments, including Military Affairs and Atomic Energy, had not updated procurement policies as per the 2017 order.
  • By April 2024, key ministries such as Telecommunications and Electronics had not incorporated the 2020 amendments into their procurement rules.
  • Common restrictive practices identified included specifying brands like Cisco for telecom products and Otis for lifts, despite their local manufacturing presence.

Challenges Noted by Officials

  • A lack of supply response from domestic suppliers is a significant challenge, as mandates alone do not ensure availability or quality.
  • Procurement entities sometimes specify foreign brands due to technical requirements that local suppliers cannot meet.

Committee of Secretaries (CoS) and Compliance Reporting

  • In February 2023, the CoS highlighted issues related to excessive turnover requirements and brand-specific tenders violating both the 2017 order and General Financial Rules.
  • Ministries were directed to address violations and ensure accountability.
  • Compliance reporting has been weak, with only a few ministries like Railways and Power submitting regular reports by April 2024.

Case Studies and Grievances

  • Instances of corrective action include AIIMS, Jodhpur cancelling a tender after grievances about restrictive requirements and brand specifications.
  • The Confederation of Indian MSME in ESDM & IT successfully contested a tender requiring foreign certifications for local suppliers.
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