Supplies to manage the country's Covid outbreak will be exempt from local sourcing rules until 30 September © AFP/Getty Images
Supplies to manage the country's Covid outbreak will be exempt from local sourcing rules until 30 September © AFP/Getty Images

India suspends local sourcing rules to tackle Covid wave

19 May 2021

The Indian government has temporarily suspended Make in India requirements for public procurement when it comes to sourcing supplies to fight the country’s wave of Covid-19.

The Ministry of Commerce and Industry said the exemption would be in place until 30 September.

“The government has exempted the public procurement of supplies required for containment of Covid-19 global pandemic from the applicability of Public Procurement (Preference to Make in India) Order, 2017,” the ministry said in a statement.

The government set up the Make in India programme four years ago to promote domestic production of goods and services.
After appearing to shrug off the initial wave of the pandemic, in recent weeks the country has been hit by a second wave that has led to more than 25m cases and 275,000 recorded deaths.

Many media reports claim real case levels are much higher than official statistics suggest.

Indian carmaker, Tata Motors, which owns Jaguar Land Rover, said it expected to be adversely affected by supply chain disruptions caused by lockdowns and the global semiconductor shortage.

“While demand remains strong, the supply situation over the next few months is likely to be adversely impacted by disruptions from Covid-19 lockdowns in India and semiconductor shortages worldwide,” said Tata Motors said in a stock exchange filing.

The carmaker said it expected the first quarter of the fiscal year starting in April 2021 to be relatively weak due to these factors and commodity price inflation, but things would improve gradually from the second quarter.

P.B. Balaji, chief financial officer at Tata Motors, said he expected the company to perform “a very strong bounce back” due to improving supply chain situations later in 2021.

Currently 28 Indian states out of 36 have lockdowns and a high percentage of car dealerships are closed.

Suzuki's Indian unit halted production at three plants this month because of a lack of oxygen for welding at suppliers’ factories due to a nationwide shortage of the gas, Nikkei Asia reported.

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