Centre revises PMI policy, includes PLI manufactured products, ET Telecom

NEW DELHI: The Department for Promotion of Industry and Internal Trade (DPIIT) on Friday amended the Make in India (PMI) Preference for Government Procurement Policy, 2017. Companies will now have to adhere to local content. There is also a provision for procurement of products manufactured under the Production Linked Incentive (PLI) scheme.

“The manufacturers producing an article under the PLI scheme shall be considered as Class II local suppliers for that article unless their minimum local content is equal to or higher than the declared Class I local supplier for that article, provided the manufacturer has received an incentive from the concerned PLI ministry for the article,” the notification said.

However, it is applicable only for the specific period as specified by the PLI ministry concerned.

The amended policy also added that local content means the amount of value added in India. This value, unless otherwise prescribed by the Ministry of Economic Affairs, is the total value of the article procured (excluding net domestic indirect taxes) minus the value of the imported content of the article (including customs duties) as a percentage of the total value, expressed as a percentage.

It was further clarified that imported items sourced locally through resellers or distributors are excluded from the definition of local content.

For contracts involving multiple items, the weighted average of all items should be taken into account when calculating local content, it was added.

It was further stated that items identified as having sufficient local capacity and competition should be required to be sourced from local Class I suppliers in the context of system integration, EPC or turnkey contracts or service tenders.

“If a local Class I supplier is not eligible for contract award for at least 50% of the quantity offered, preference in purchasing shall be given to the local/non-local Class II suppliers, provided that their offer falls within the 20% margin of the preferential purchase of the highest bidder eligible for contract award. In this way it is ensured that the local Class I suppliers as a whole are eligible for contract award for at least 50% of the quality offered.”

The new, revised rules will not apply to orders valued less than Rs 5 lakhs.

It was also made mandatory to verify local content by providing self-certification in case of supply of products valued less than Rs 10 crore.

The ministry also calls for an investigation into cases where a government agency imposes restrictive or discriminatory conditions on domestic suppliers.

“The DPIIT has addressed everything that we have been asking for over the years, including the issue of EPC and turnkey contracts, definition of domestic value addition and clarifications on Class I,” said RK Bhatnagar, director general, Voice of Indian Communication Technology Enterprises (VoICE).

He further said that it has “become very important for the Department of Telecommunications (DoT) to publicize the PMI policy” as all these preferences would only be applicable to products identified by the Department of Commerce.

The Delhi-based domestic industry group said imported products will not be covered by the TOT agreements unless the ministry explicitly specifies it for products for which capacity is not available.