Government considering raising local content requirements for public procurement: Report

The government is considering making changes to its procurement policy in order to boost domestic manufacturing. The industry department has put forth a proposal to increase the minimum local content requirement for public procurement for Class-I and -II suppliers. Currently, the requirement stands at 50 per cent, but the proposal suggests raising it to 70 per cent for Class I suppliers and 50 per cent for Class II suppliers.

However, certain industries such as defence production, electronics and information technology, telecommunications, mines, railways, power, ports, and shipping & waterways are being considered for exemption from these enhanced limits. A senior government official, speaking on the condition of anonymity, stated that the inter-ministerial consultation process is currently underway to discuss these proposed changes.

The move to increase the local content requirements for public procurement aligns with the government’s push towards promoting self-reliance and boosting domestic manufacturing capabilities. By incentivizing local production through procurement policies, the government aims to reduce dependency on imports and support the growth of domestic industries.

It is important to note that these proposed changes are still in the consultation phase and subject to further discussions among various government departments. The ultimate goal is to strike a balance between supporting local manufacturing and ensuring the availability of quality products and services for public procurement needs.

In conclusion, the government’s efforts to tweak its procurement policy to prioritize domestic manufacturing could have significant implications for various industries. By increasing the local content requirements, the government aims to create a conducive environment for local businesses to thrive and contribute to the country’s economic growth. It remains to be seen how these proposed changes will shape the future of procurement policies in India.

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