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India to set aside 110 power plant equipment and services for local manufacturers

Friday, 31 Jul 2020
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India will reserve non-local suppliers in bidding for contracts for supply of about 110 goods and services to power plants. The non-local suppliers are manufacturers with less than 20 percent local content. 
The equipment includes transformers, switchgears, cables and insulators which are imported in large quantity in the country despite available local capacity. 
These tenders will be open to only Class-I local suppliers or those vendors who have more than 50 percent local content. 
The Power Ministry has issued public procurement order with separate lists of products with adequate manufacturing capacity in the country and those being manufactured locally under technology license from foreign countries. 
The Ministry’s latest order dated 28 July 2020 mandates that tenders for these 110 equipment and works can be awarded only to local companies with high localisation. 
The Ministry’s order is based on 4 June 2020 order of the Department for Promotion of Industry and Internal Trade (DPIIT) that provides for compulsory purchase preference to local suppliers. 
The order will apply to procurements made by the Central and state government companies and on projects funded by the Power Finance Corporation and REC. 
The order has identified another 69 products and services that are being manufactured under license from foreign manufacturers holding intellectual property rights. These products can be procured from Class-II local suppliers with localisation content between 20 percent and 50 percent. 
Only Class-I local supplier and Class-II local supplier will be eligible to bid in procurement undertaken by procuring entities, except when Global Tender Enquiry has been issued. In global tender enquiries, non-local suppliers will also be eligible to bid along with Class-I local suppliers and Class-II local suppliers. 
The order has advised the state-run entities to revise their tender documents. It has also advised the PSUs to allow participation from only those foreign firms which set up manufacturing base in the country. In case of technology partnerships, the PSUs must insist for technology transfer. 
The Power Ministry’s order on 2 July 2020 has put in place an effective ban on imports from prior-reference countries like China and Pakistan, which require permission. All other imports will be tested at government-approved labs. 
The department of expenditure has amended its General Financial Rules 2017, requiring bidders from a country sharing land borders with India to register to be eligible to bid for PSU contracts.


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