Kumar Siddhartha, Pune
To bring improvements in the manufacturing ecosystem, the government is likely to ease public procurement requirements for new-age products that are largely not available locally. The Commerce and Industry Minister Piyush Goyal declared this plan on Sunday. He underlined that sector-specific changes are needed because different sectors take time before a well-built ecosystem comes into force. Though value addition to the sectors may be low at the start, it increases gradually. The government is exploring if a roadmap can be developed for these sectors that will navigate them through their journey to Class 1 or Class 2 under public procurement norms.
DPIIT has divided the list into Class 1 and Class 2 suppliers based on the company’s local content. All the companies with above 50% of local content come under Class 1 and those with 20-50% fall under Class 2. Goyal described prior experience will be a pre-condition for companies to participate in public procurement. However, the government is considering alternative routes, such as laboratory testing, which would allow companies making new and innovative products to qualify for supply, even without any earlier experience. Goyal added that to consult technical experts and explore the possibility of relaxing these procurement rules, feedback from different sectors was sought.
As per the Ministry of Commerce and Industry, investments worth ₹1.46 lakh crore have been made under the PLI scheme up to August 2024 and are set to breach ₹2 lakh crore in the next year. The ministry stated that they have generated ₹12.5 lakh crore worth of production and sales. This has led to around 9.5 lakh direct and indirect jobs created for the stakeholders, which will soon touch 12 lakh. Exports worth ₹4 lakh crore have been generated through this scheme, with significant in-payload sectors of electronics, pharmaceutical, and food processing.
Mobile phone manufacture has now become one half of the total output of the electronics sector, which has seen exports triple to what it was in FY21. Other emerging industries such as drones have turned over seven times their turnover while growth, largely led by SMEs and startups in the medical devices industry, has also been quite significant. Technology transfers for critical equipment such as CT scanners have permitted local production. The food processing sector has really helped in sustainable improvement of agricultural practices, boosting millet production and organic supply, and therefore contributing to the general growth of the sector.