The Indian government is set to rigorously examine 1,000 high-value procurement tenders across 25 central entities, including Central Public Sector Undertakings (CPSUs), to evaluate the impact of its "Make in India" policy. This comprehensive review, spearheaded by the Department for Promotion of Industry and Internal Trade (DPIIT), aims to assess the effectiveness of the Public Procurement (Preference to Make in India) Order 2017. A key focus will be on determining the extent to which procurement from countries sharing land borders with India has decreased, and conversely, how much procurement has increased from local suppliers, particularly Class-I local suppliers.
To conduct this extensive study, the DPIIT intends to onboard a consulting agency. This agency will scrutinize complete tender documents, encompassing eligibility requirements, technical specifications, and other terms and conditions. The agency will also conduct a detailed impact assessment study each year of the contract period to assess the impact of the Public Procurement (Preference to Make in India) Order on the public procurement ecosystem. This assessment will include details such as the quantum of procurement exclusively from Class-I Local suppliers by granting them purchase preference and the increase in procurement from Class - I and Class - II local suppliers.
In July 2020, the Indian government amended the General Financial Rules (GFR) 2017 to impose restrictions on bidders from countries sharing a land border with India. This amendment mandates that bidders from these countries must register with a Registration Committee constituted by the DPIIT and obtain political and security clearances from the Ministries of External Affairs and Home Affairs, respectively, to be eligible for government procurement contracts. The stated reason for these restrictions is to bolster national security. India shares land borders with Pakistan, China, Nepal, Bhutan, Myanmar, Bangladesh, and Afghanistan.
These restrictions extend to public sector banks and financial institutions, autonomous bodies, Central Public Sector Enterprises (CPSEs), and Public-Private Partnership projects receiving financial support from the government. State governments have also been urged to implement similar measures for their own procurement activities.
In 2024, India further tightened public procurement norms by excluding imported inputs when calculating the local content in its purchase orders. This measure is designed to encourage the use of domestically produced goods and services in government projects.
The government's efforts to promote domestic manufacturing through the "Make in India" initiative and restrict procurement from countries sharing land borders reflect a strategic focus on strengthening the Indian economy and enhancing national security. By scrutinizing these 1,000 tenders, the government aims to gain valuable insights into the effectiveness of its policies and identify areas for improvement. The outcome of this assessment will likely influence future procurement strategies and further refine the "Make in India" program to achieve its goals of self-reliance and economic growth.
