As the Modi government turns three later this month, the government will bring out a full-fledged ‘price preference’ policy favouring Indian-owned companies. PMO is focusing on 'Buy Indian' policy for boosting Indian enterprises across sectors. This mega policy is learnt to be in the works covering several key economic sectors, where domestic procurement should be given preference.
This is coming at a time when many developed countries, including America and Australia, are on an economic nationalism spree. US President Donald Trump’s protectionist stance, especially related to H1B visa, for instance, has significantly hurt the information technology industry.
Top government officials, who spoke off record, told ET that the new price preference policy will help Indian enterprises that apply for any government purchase/tender. The other major policy change in the works will involve compulsory ‘value addition’.
Both proposals — ‘price preference’ and ‘value addition’ — are part of the larger plan of the Modi government to boost production in India by Indian companies. These policy decisions are being taken to further accelerate the prime minister’s flagship ‘Make in India’ mission and to complement it, said officials.
In a recent interview, the Minister of State for Commerce & Industry said, "The government was planning to come out with a policy on Industrial Revolution 4.0 by September, marking the third anniversary of Make In India, to help companies manufacture in the country and create jobs. In the run-up to a comprehensive policy on preferential domestic procurement, the government has over the past two months announced some initiatives on those lines. Earlier this month, there was a policy on preference for sourcing of domestic iron and steel for infrastructure projects being built by state-owned companies, in a move aimed at shielding the sector from the onslaught of dumping of cheaper metals by countries such as China."
The sectors that the new policy could cover are likely to have names where the government is the largest consumer such as engineering, machinery and paper, among others, economists said.
The policy, likely to be finalised by end of May.