Policy to prefer locally-made goods in govt procurement

The commerce and industry ministry is working on fixing the nuts and bolts of a policy to give preference to domestically manufactured goods in government procurement with a view to promoting Make in India.

"The policy would be in tune with the Make in India initiative. Both the departments of commerce and industry have advocated such a policy," a senior commerce ministry official said.

The official said the global trade rules of the World Trade Organisation (WTO) allow member countries to prefer domestically made products for government procurement purposes.

Similar policies exist in several economies, including the US. Because of this reason, many Indian pharmaceutical companies have set up their manufacturing bases in America.

Government procurement in countries runs into thousands of crores and hence, it encourages domestic players to make goods locally.

However, procurement of goods can not be used for trading purposes.

"In government offices, we need items like phones, computers, ACs, television and stationery. I can prefer local products for my own consumption. It will be a good incentive for domestic manufacturers," the official said, insisting that the government will not relax quality guidelines.

Through this policy, "we expect that prices will also be competitive", the official stressed.

The ministry last year launched the government e- marketplace (GeM) for online purchase of goods and services by various central government ministries and departments.

The move is aimed at bringing in more transparency and streamlining the government procurement, estimated at over Rs 10,000 crore a year.

The Make in India initiative was launched by Prime Minister Narendra Modi in September 2014. It aimed at promoting India as an investment destination and a global hub for manufacturing, design and innovation.