Report by the Secretariat (WT/TPR/S/249 04), page 36, paragraph 6.
Public procurement is considered as an important instrument of government policy and is used to obtain certain socio economic objectives. As a result, the Central Government has set reservations and price preferences as part of the procurement system. However, competition from foreign suppliers is ordinarily allowed.
In what circumstances and under what conditions would competition from foreign suppliers be allowed?
Could India please elaborate on its reservations and price preferences in its procurement system? Does this include the setting of minimum prices? If yes, how does India reconcile this with its competition policy?
Reply: Procurement by all central ministries/departments are subject to GFRs. Unless specifically indicated in the tender notice/document, both domestic and foreign suppliers can participate against open tender. Carve outs and offsets are essential for the development of the sensitive sectors in a developing economy like India, and has been availed of even by other GPA signatories. The Central Government, through administrative instructions, has reserved certain products for procurement from specific sectors such as MSMEs, KVIC etc. and have been allowed price preference to a specified level. For example, 358 products belonging to respective industry sectors are reserved for procurements from micro and small enterprises (MSEs) by state/central ministries/departments/PSUs. Instructions relating to price preference/reservation for procurement of certain items/categories of suppliers are issued by certain ministries/departments such are D/o Public Enterprises and M/o Micro, Small and Medium Enterprises.
