Tender conditions tweaked to restrict ‘Make in India’ products 

Union Government flags discriminatory tender conditions against local suppliers 

The Union Government has flagged over a dozen “restrictive and discriminatory” conditions which prevented local suppliers from participating in the bidding process. The tweaking of the tender conditions were in violation of the Public Procurement (Preference to Make in India) Order, 2017, issued to protect the interests of local suppliers. 

Last week, the Ministry of Railways directed General Managers of all Zonal Railways and Production Units to make sure that all procuring agencies across the railway network complied with the PPP-MII Order and avoid including any “restrictive and discriminatory” conditions against the local suppliers. 

The communication follows the latest guidelines issued by the Department of Promotion of Industry and Internal Trade, Ministry of Commerce and Industry on December 20, 2022, which highlighted some of the common examples of “restrictive and discriminatory” conditions against local suppliers and some other eligibility norms that were non-compliant to the PPP-MII Order. 

The DPIIT in consultation with the Department of Expenditure and the Government e Marketplace (GeM) had identified over a dozen conditions commonly introduced in tender conditions which went against the local suppliers but suited the interests of foreign manufacturers and issued an advisory. 

For instance, the advisory said that foreign technical standards like minus 25-degree temperature compatibility for certain equipment procured for airports were incorporated to eliminate ‘Make in India’ products without any justification of requirement of that specification value for intended end use of the equipment/service.

Among other tweaked tender norms were standard certification by foreign agencies without specifying any equivalent Indian certification or alternative in the procurement of medical and electronic devices. 

Excessive turnover requirement as a pre-qualifying criteria, not commensurate with the financial capacity required for executing the contract, insisting on specific experience of supplying products to other nations such as export to G8 countries, additional requirement of bank guarantee and delayed payment terms were among other conditions that prevented the local manufacturers from taking part in the procurement process.