DoT to review public sourcing policy
Department of Telecommunications
(DoT) plans to review its
public procurement policy
(PPP) with preference to
Make-in-India
(MII) order issued in October last year in a bid to incorporate more products and likely relax
local sourcing requirements
.
The DoT had identified 36 products that must have more than 50% local value addition to be eligible for procurement by the Centre and its affiliated entities. Since
5G products
were excluded from the list, it had incorporated an enabling provision to review the products from time to time.
As per the DoT's notice issued on Wednesday seeking stakeholders' comments, it proposes to review its PPP-MII order dated October 21, 2024, specifically for aspects concerning the list of products notified under the order, product wise local content (LC) requirement including the ceiling of LC for design, conditions of inputs (including design) to be qualified as LC and criteria for calculating LC for software products.
The stakeholders can send their comments within 30 days.
"Multiple reports (NITI Aayog, Trai, MAIT, PLI companies, etc) indicate that India's limited component ecosystem poses challenges in achieving 50-60% LC in electronic/telecom products. Recognizing this constraint, the conditions for LC qualification also requires a review," the notice said.
Currently, the list of products where the minimum LC has to be more than 50% include routers, ethernet switches, media gateways, customer premises equipment, Gigabyte Passive Optical Network equipment, satellite phones and terminals, optical fibre and cable and telecom batteries.
While tightening the norms and pushing for Make-in-India, the government had excluded imported items sourced locally from resellers and distributors from the calculation of LC. Besides, royalties, technical charges paid out of India and supply of repackaged and refurbished goods were excluded from the calculation of LC.
In case of public procurement, preference is given to class-1 suppliers. In case, class 1 supplier is not able to supply, class 11 supplier is given a chance.
All companies making products under the production-linked incentive (PLI) scheme for
telecom equipment
would be treated as class 11 suppliers. A class 1 supplier has to have 50% LC while a class 11 supplier needs 20% LC.
"Any recommendations for the inclusion of new products or exclusion of existing ones must be substantiated with detailed justification...," the notice said.
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