Government has issued Public Procurement (Preference to Make in India) [PPP-MII] Order 2017 vide the Department for Promotion of Industry and Internal Trade (DPIIT) Order No.P-45021/2/2017-B.E.-II dated 15.06.2017 and subsequent revisions vide Order No. 45021/2/2017-PP(BE-II) dated 28.05.2018, 29.05.2019, 04.06.2020 and 16.09.2020 to encourage ‘Make in India’ and to promote manufacturing and production of goods, services and works in India with a view to enhancing income and employment. This Order is issued pursuant to Rule 153 (iii) of the General Financial Rules 2017. The salient features of the aforesaid Order are as under:
- The Order is applicable for procurement by Ministry / Department / attached / subordinate office of, or autonomous body controlled by, the Government of India and includes Government companies as defined in the Companies Act.
- In procurement of all goods, services or works in respect of which the Nodal Ministry/ Department has communicated that there is sufficient local capacity and local competition, only ‘Class-I local supplier’, as defined under the Order, shall be eligible to bid irrespective of purchase value.
- The margin of purchase preference shall be 20%. ‘margin of purchase preference’ means the maximum extent to which the price quoted by a local supplier may be above the L1 for the purpose of purchase preference.
- Ministry of Electronics and Information Technology is the Nodal Ministry for implementation of the Electronic Product Notifications issued in furtherance of PPP-MII Order 2017.
Classes of Local Suppliers based on local content as per the revised PPP-MII Order dated 04.06.2020 issued by the Department for Promotion of Industry and Internal Trade (DPIIT) are as under:
- Class-I Local supplier – a supplier or service provider, whose goods, services or works offered for procurement, has local content equal to or more than 50%.
- Class-II Local supplier – a supplier or service provider, whose goods, services or works offered for procurement, has local content more than 20% but less than 50%.
- Non-Local supplier – a supplier or service provider, whose goods, services or works offered for procurement, has local content less than or equal to 20%.
- Only ‘Class-I local supplier’ and ‘Class-II local supplier’ shall be eligible to bid in procurement of all goods, services or works, and with estimated value of purchases less than Rs. 200 crore.
In furtherance of the aforesaid revised PPP-MII Order dated 04.06.2020, MeitY has notified the mechanism for calculation of local content for the following 13 Electronic Products vide Notification No. 43/4/2019-IPHW-MeitY dated 07.09.2020:
(i) Desktop PCs, (ii) Thin Clients, (iii) Computer Monitors, (iv) Laptop PCs, (v) Tablet PCs, (vi) Dot Matrix Printers, (vii) Contact and Contactless Smart Cards, (viii) LED Products, (ix) Biometric Access Control / Authentication Devices, (x) Biometric Finger Print Sensors, (xi) Biometric Iris Sensors, (xii) Servers, and (xiii) Cellular Mobile Phones.
MeitY has also notified Cellular Mobile Phones under clause 3(a) of the PPP-MII Order which mandates that public procurement of Cellular Mobile Phones from local suppliers only.
Government E-Market Place (GeM) Portal and NICSI, the two major procurement agencies of Government of India, are expected to ensure compliance of the Electronic Products Notification in their procurement. In case of a complaint STQC will be the agency to look into the domestic value addition (local content).
All Ministries / Departments / Organizations shall insert the important clauses of PPP-MII Order 2017 in their RFPs / tenders to conform to the PPPMII Order 2017 for procurement of notified electronic products.