Purchase Preference To Local Suppliers In Defence Procurement

A year after the Department of Industrial Policy and Promotion (DIPP) notified the policy (Government Policy) on purchase preference for the local suppliers, the Ministry of Defence (MoD) has issued 4 (four) notifications between June and September 2018 giving effect to that policy in relation to defence procurements.

It may be recalled that the Government Policy notified in 2017 provides that only the local suppliers will be eligible to participate in public procurement up to INR 50 Lakhs (approximately USD 71,500) provided enough local capacity exists to generate competition. (The policy exempts procurements up to INR 5 Lakhs (approximately USD 7,150). The term 'local supplier' denotes a supplier or service provider whose products or services meet the prescribed minimum local content. It is evident from the context that the local supplier must be an Indian entity.