Few PSUs Facing Challenges In "Make In India" Procurement

When the government had emphasised increased procurement of goods and services by the public sector from domestic sources rather than international sellers, it had hoped to support and encourage domestic industry, while reducing dependence on imported goods.

But this has led to problems aplenty for India’s public sector procurers, with many complaining that the move has compromised their productivity, efficiency, and global competitiveness.

Global tenders are typically explored only when a suitable domestic supplier cannot be found, sources said. In such a case, a request seeking exemption from the Make in India clause is moved to the Cabinet Secretariat through the concerned administrative ministry or department.

However, these requests for exemptions often face delays or rejections, leading to the procurement of inferior products from domestic suppliers, say the PSU manufacturers. The delay also multiplies challenges for them, they add.

Over the years, this government has increasingly prioritised 'Make in India' in the PSU procurement processes, often restricting global tenders for certain goods and services to promote domestic manufacturing.

As a result, sources said, there are some industry cartels that are working against global tenders, as they don't want to compete with international players. Meanwhile, with an eye on the promised US$ 5 trillion economy, India is aggressively wooing foreign investors amid geopolitical shifts and supply-chain disruptions. 

The government launched the Production Linked Incentive (PLI) scheme in 2020-21 across 14 key manufacturing sectors to support the Make in India programme, by fostering economies of scale and enhancing global competitiveness. 

The objective of the initiative was to facilitate investment, foster innovation, build best-in-class manufacturing infrastructure, make it easy to do business, and enhance skill development. The government has also set up several measures to boost private investment.