DoT mulls reviewing PPP-MII order, may relax local sourcing requirements
New Delhi: The
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
.
While issuing the guidelines for the PPP Make-in-India order last year, the DoT had identified 36 products that must have over 50% local value addition to be eligible for procurement by the Central government and its affiliated entities.
Since
5G products
were excluded from the list, the DoT had incorporated an enabling provision to review the products from time to time.
As per DoT's notice 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.
'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 DoT notice said.
Currently, the list of products where the minimum LC has to be over 50% include routers, ethernet switches, media gateways, customer premises equipment, GPON equipment, satellite phones and terminals, optical fibre and cable and telecom batteries.
While tightening the norms and pushing 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 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 including verifiable data such as list of major manufacturers, estimated LC value (%), annual production capacity, domestic sales and exports/imports (with figures), sales to public sector entities etc,' the notice added.
The stakeholders can send their comments within 30 days.
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