New Delhi: The government is examining tweaking its public procurement norms to aid manufacturers under the production-linked incentive (PLI) schemes. The government is assessing the idea to offer the benefit of deemed local supplier status to a company that gets an item manufactured by its contract manufacturer, who is a beneficiary under the PLI schemes.
In July, India had revised the Make in India public procurement norms to allow manufacturers whose product is availing the PLI to be a deemed Class-II supplier.
Class-l local supplier means a supplier or service provider, whose goods, services or works offered for procurement meets the minimum local content of 50% while for Class-Il local supplier, it is 20%. “This issue was raised and we have sought inputs on whether the owners of intellectual property and brand or their contract manufacturers should get the local supplier benefits,” said an official, adding that the issue is being examined.
In July, the Department for Promotion of Industry and Internal Trade (DPIIT) revised the norms to include companies manufacturing an item under PLI scheme to be treated as deemed Class-II local supplier for that item provided they have received the PLI benefit from the respective ministry. The DPIIT and the telecom department are discussing the issue.
As per another official, the issue of PLI beneficiaries getting greater market access in government procurement is being reviewed in certain sectors wherein Class-I and Class-II criteria to define suppliers can be liberalised. “In government procurement, amendments may be needed in some sectors where domestic value addition is less but has gradually increased,” said the second official.
India has in put place PLI schemes for 14 sectors to increase local production of mobiles, automobiles, electronics components and pharmaceuticals among others.
There are around 755 beneficiaries of the PLI schemes and around ₹1.5 lakh crore incremental investments of the targeted ₹3lakh crore have already come in. There is a production increase in terms of sales of ₹12.5 lakh crore and employment generation has been about 1.05 million people, both of which are a third of the original target.
As per the second official, the government is looking at ways to provide support for entities that are producing goods for the first time in India.
