The Cabinet today approved a public procurement policy to give preference to domestically manufactured goods with a view to promote 'Make in India' initiative.
The move would facilitate local manufacturing and boost domestic demand for locally manufactured products, the commerce ministry said in a series of tweets.
"Preference in public procurement on the basis of minimum local content. Only local suppliers eligible in procurement of Rs 50 lakh or less, if sufficient local capacity and competition ensured," it said.
Briefing about the Cabinet meeting, Finance Minister Arun Jaitley said the preference to the domestic manufactured goods would be given under the "Government Procurement Preference to Make in India order 2017".
The ministry said that eligibility norms/conditions would be made non- restrictive and avoided in tenders.
It further said: "20 per cent margin of purchase preference for local suppliers in procurement of more than Rs 50 lakh."
Standing committee would oversee implementation of Make in India preference in public procurement, the ministry said, adding there would be a transparent mechanism of self- certification and a third party certification to verify local content.
There would also be an annual review to increase local content requirements in public procurement, which would be subject to local competition and quality.