IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

state-controlled

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 24 May 2017 | Removal date: open ended

Public procurement preference margin

The same government announcement included the following provision. For government procurement of INR 5 million (~USD 77,172) and more or where sufficient local capacity and competition doesn't exist, if the lowest bid is from a non-local supplier and if there is a bid from a local supplier that is within a margin of 20% from the lowest the bid, then the local supplier will be given an opportunity to match the lowest bid. Further, in case the local supplier matches the lowest bid, it will get to supply a) 100% of the procurement if the procurement is non-divisible or b) 50% of the procurement if the procurement is divisible, where the contract of the rest 50% will be given to the non-local supplier.

On 4 June 2020, a Revised Procurement Order was notified that defined Class-I local suppliers (minimum local content of 50%) and Class-II local suppliers (local content of 20% to 50%). Further, according to the revised order

  • In case where local and non-local suppliers are eligible, if the work is divisible the "Class-1 local supplier' will be awarded the contract if it is the lowest bidder. In case the lowest bidder is not a Class-1 local supplier, the lower bidder will be awarded 50% of the contract. For the remaining 50%, the lowest bidding Class-I local supplier will be invited to match the lower overall price within a margin of 20% from the bid. In case this is not matched, the next lowest Class-I supplier will be invited and so forth until all Class-I supplier are invited after which the lowest bidder will be invited to supply the quantity.
  • In case where local and non-local suppliers are eligible and the work is not divisible, if the Class-I local supplier is not the lowest bidder the lowest bidding Class-I local supplier will be invited to match the lowest overall bid within a 20% margin. In case the supplier fails to match the price, the next lowest Class-I local supplier will be invited, and so forth. In case none of the Class-I local suppliers can match the lowest bid within the margin of preference, the contract will be awarded to the overall lowest bidder.

*INR to USD as on 24 May 2017 - INR 64.79/USD

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