Indian Railways mulls local content clause in procurement process

29 July 2020

Indian Railways is planning to increase the participation of local vendors in its procurement process as part of prime minister Narendra Modi’s plan to make the country self-reliant.

Piyush Goyal, minister of railways and commerce & industry, said it was vital to create a transparent purchasing environment within Indian Railways and make sure more local vendors get to participate in the procurement process.

Indian Railways is mulling introducing a local content clause in its procurement process to encourage more bids from local suppliers.

The Ministry of Railways said the policy would boost Modi’s “Atma Nirbhar Bharat”, or “self reliant India”, initiative and it would seek the support of the Department for Promotion of Industry and Internal Trade (DPIIT) to make changes.

“In a review meeting... for steps to promote Make in India products in procurement process, it was emphasised to increase the participation of local vendors in the procurement process,” the ministry said.

“It was felt that encouragement needs to be given to such vendors who can supply higher locally-manufactured content.”

Indian Railways said it was considering creating an online procurement FAQ section and a helpline number so vendors could get clarity on various issues relating to the procurement process.

A meeting involving a railways minister and officials was told there was a need to develop strategies to increase the participation of Indian service providers and component manufacturers.

It was suggested the ministry could use India’s Government e-Marketplace (GeM) platform to open the industry to SME and remote suppliers.

Indian Railways is integrating its procurement systems with GeM and once this process is complete GeM is set to become a single point public procurement portal for all Indian government agencies.

“The website should, transparently, provide every interested vendor with a clear idea of how to do business with Indian Railways,” the ministry said.

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