Make in India and Atmanirbhar Bharat: How They Change Government Tender Rules

The Make in India and Atmanirbhar Bharat policies have fundamentally changed government procurement rules. Purchase preferences of up to 20%for domestically manufactured goods, restrictions on global tenders below ₹200 crore, and the Class I/Class II local supplier framework directly affect who can bid and who wins.

The PPP-MII Order (2017, Revised 2020)

• Local content requirement — goods must meet minimum domestic value addition (typically 50% for Class I, 20–50% for Class II local suppliers)
• Purchase preference — Class I suppliers get preference over Class II and non-local suppliers, even if their price is up to 20% higher
• Global tender restriction — government entities cannot float global tenders for procurement below ₹200 crore, unless no domestic supplier exists
• GeM enforcement — GeM requires sellers to declare local content percentage. Buyers can filter for Class I/II suppliers.

Class I vs Class II Suppliers

• Class I Local Supplier — minimum 50% domestic value addition. Gets full purchase preference and participates in all categories.
• Class II Local Supplier — 20–50% domestic value addition. Participates in tenders but gets preference only over non-local suppliers.
• Non-Local Supplier — less than 20% domestic value addition. Can participate but gets no preference. Excluded from tenders restricted to local suppliers.

How Purchase Preference Works

• If L1 is a non-local supplier, the lowest Class I supplier within 20% of L1 gets the option to match L1
• If no Class I supplier is within 20%, the lowest Class II supplier gets the option
• The matched supplier gets the order for 50% of quantity (or full quantity if they're the only qualifying local supplier)
• Remaining quantity goes to L1

Sectors with Strong Make in India Push

• Defence — Buy Indian-IDDM (Indigenously Designed, Developed, Manufactured) is the highest priority category in DAP 2020. 75% of defence procurement budget reserved for Indian vendors.
• IT hardware — laptops, desktops, servers must meet local content norms under the Preferential Market Access (PMA) policy
• Solar equipment — Approved List of Models and Manufacturers (ALMM) mandates domestically manufactured modules for government-funded projects
• Medical devices — phased manufacturing programme increases local content requirements progressively
• Railway rolling stock — Vande Bharat and other trainsets under Make in India with technology transfer requirements

Compliance Tips

• Self-certify your local content percentage accurately — false declaration leads to debarment for 3 years
• Maintain records of local value addition calculation — government can verify claims post-award
• If you're an importer, consider local assembly or manufacturing tie-ups to qualify as Class II or Class I
• Check product-specific local content thresholds — some items have higher requirements than the standard 50%