Executive Summary:
This notification outlines the Public Procurement Preference to Make in India Order 2017, specifically for Automobile and Automotive Components. It mandates government procuring entities to prioritize domestically manufactured products in these sectors to encourage local manufacturing and employment. The notification took immediate effect and will be reviewed after March 31, 2019. It remains valid until a revised notification is issued.
Key Points / Main Content:
* **Purpose and Context:**
* Implements the Public Procurement Preference to Make in India Order 2017.
* Aims to promote domestic manufacturing and production of goods and services, enhancing income and employment.
* **Scope:**
* Applies to Automobile and Automotive Components.
* Automobiles include two and three-wheelers, passenger vehicles, and commercial vehicles.
* Automotive Components include spares required for manufacture/maintenance of the above vehicles.
* **Local Content Requirements:**
* Automobiles: 65% local content to qualify as domestically manufactured.
* Automotive Components: 60% local content to qualify as domestically manufactured.
* **Local Content Calculation Procedure:**
* Domestic Value Addition (DomBOM) can be calculated using various formulas based on available data, including:
* Sum of costs of all inputs sourced domestically.
* Ex-Factory price minus profit, imported Bill of Material (BOM), and warranty costs.
* Market price minus post-production costs, profit, warranty costs, imported BOM, and sales/marketing expenses.
* Total Bill of Material (TotalBOM) can be calculated using similar formulas.
* Percentage of domestic value addition = (DomBOM / TotalBOM) * 100.
* Agencies assessing should use at least two formulas to validate assessments.
* **Verification of Local Content:**
* Suppliers must self-certify that items meet minimum local content requirements, providing location details of local value addition.
* For procurements exceeding Rs. 10 crore, suppliers must provide a certificate from a statutory auditor/cost accountant (for companies) or a practicing cost accountant/chartered accountant (for others).
* **Penalties for False Declarations:**
* False declarations breach the Code of Integrity under General Financial Rules.
* Debarment for up to two years and other permissible actions under law.
* **Nodal Ministry:**
* The Ministry of Heavy Industries and Public Enterprises (MHIPE) is the Nodal Ministry for monitoring implementation.
* **Validity:**
* Effective immediately and reviewed after March 31, 2019.
* Valid until a revised notification is issued.
Impact Analysis:
* Government Procuring Entities:
* Impact: Required to give preference to domestically manufactured Automobile and Automotive Components.
* Action Required: Implement the preference policy in procurement processes and ensure compliance with local content requirements.
* Automobile and Automotive Component Manufacturers:
* Impact: Opportunity to gain preference in government procurement.
* Action Required: Meet the local content requirements, provide necessary certifications, and comply with verification processes.
* Statutory Auditors/Cost Accountants/Chartered Accountants:
* Impact: Required to provide certificates verifying local content for high-value procurements.
* Action Required: Conduct thorough audits and provide accurate certifications.
Key Entities Referenced
Public Procurement Preference to Make in India Order 2017: A government order to encourage Make in India and promote manufacturing and production of goods and services in India.
Department of Industrial Policy Promotion: The department that issued the initial notification related to the Public Procurement Preference to Make in India Order 2017.
Ministry of Heavy Industries and Public Enterprises: The ministry notifying the preference for domestically manufactured Automobile and Automotive Components.
Automobile and Automotive Components: The products for which preference is being given to domestically manufactured goods.
General Financial Rules: Rules that define code of integrity and consequences for false declarations.
New Delhi: The location where the notification was issued.
Pravin Agrawal: Joint Secretary who signed the notification.
Mayapuri, New Delhi: Location of the Government of India Press.
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भभभभााााररररीीीी उउउउ(cid:7)(cid:7)(cid:7)(cid:7)ोोोोगगगग एएएएववववं ं ं ं ललललोोोोकककक उउउउ(cid:7)(cid:7)(cid:7)(cid:7)मममम मममम(cid:16)(cid:16)ंं(cid:16)(cid:16)ंं ााााललललयययय
((((भभभभााााररररीीीी उउउउ(cid:7)(cid:7)(cid:7)(cid:7)ोोोोगगगग ििििववववभभभभाााागगगग))))
अअअअििििधधधधससससचचूूचचूू ननननाााा
नई (cid:4)द(cid:6)ली, 18 मई, 2018
ककककाााा....आआआआ.... 1111999988887777((((अअअअ))))....————ससससााााववववजज(cid:19)(cid:19)जज(cid:19)(cid:19) ििििननननकककक खखखखररररीीीीदददद ((((ममममककेेककेे इइइइनननन इइइइिििि(cid:28)(cid:28)(cid:28)(cid:28)डडडडययययाााा ककककोोोो (cid:30)(cid:30)(cid:30)(cid:30)ााााथथथथििििममममककककतततताााा)))) आआआआददददेशेशेशेश,,,, 2222000011117777 ककककेेेे अअअअननननपपुुपपुु ााााललललनननन मममम ++ ++ ऑऑऑऑटटटटोोोोममममोोोोबबबबााााइइइइलललल ततततथथथथाााा
ऑऑऑऑटटटटोोोोममममोोोो////टटटटवववव घघघघटटटटकककक1111 ककककोोोो अअअअििििधधधधससससििूूििूूचचचचतततत ककककररररनननन ेे ेेववववााााललललाााा आआआआददददेशेशेशेश
ससससददंंददंं भभभभःः(cid:19)(cid:19)ःः(cid:19)(cid:19)---- औऔऔऔ(cid:7)(cid:7)(cid:7)(cid:7)ोोोोििििगगगगकककक ननननीीीीिििितततत एएएएवववव ंं ंंससससंवंवंवंवधधधधनन(cid:19)(cid:19)नन(cid:19)(cid:19) ििििववववभभभभाााागगगग ((((डडडडीीीीआआआआईईईईपपपपीीीीपपपपीीीी)))) अअअअििििधधधधससससचचूूचचूू ननननाााा सससस..ंं..ंं पपपपीीीी----44445555000022221111////2222////2222000011117777----बबबबीीीी....ईईईई----ll,,,, 8888ददददननननााााककंंककंं 11115555....6666....2222000011117777
चूं(cid:4)क सरकार ने आय तथा रोजगार को बढाने के िलए भारत म(cid:27) मेक इन इि(cid:29)डया को (cid:31)ो सािहत करने तथा व#तु% तथा सेवा%
के िनमा&ण तथा उ पादन को बढावा दने े के िलए औ+ोिगक नीित एवं संवध&न िवभाग क. (cid:4)दनांक 15.06.2017 क. अिधसूचना सं. पी-
45021/2/2017 बी ई-II, के तहत लोक खरीद (मेक इन इि(cid:29)डया को (cid:31)ाथिमकता) जारी क. है।
2. चूं(cid:4)क उपरो> संदभ& के तहत अिधसूिचत साव&जिनक खरीद (मेक इन इि(cid:29)डया को (cid:31)ाथिमकता) आदशे , 2017 के अनुपालन म(cid:27) भारी
उ+ोग एवं लोक उ+म मं@ालय (एचआई एवं पीई) एतAारा अिधसूिचत करता ह ै(cid:4)क उपरो> आदेश के अनुसार घरेलु #तर पर िविनCम&त
ऑटोमोबाइल तथा ऑटोमोFटव घटकG के िलए सभी सरकारी खरीद सं#थान Hारा (cid:31)ाथिमकता दी जाएगी।
3. चूं(cid:4)क िनIिलिखत ऑटोमोबाइल तथा ऑटोमोFटव घटकG को साव&जिनक खरीद (मेक इन इि(cid:29)डया को (cid:31)ाथिमकता) आदशे , 2017 के
तहत अिधसूिचत (cid:4)कया जाता है।
3333....1111 आआआआईईईई ससससीीीी इइइइंंंंजजजजनननन आआआआधधधधाााा////ररररतततत ऑऑऑऑटटटटोोोोममममोोोोबबबबााााइइइइलललल
(क) पFरभाषाः-
इस अिधसूचना के (cid:31)योजनाथ&, ऑटोमोबाइल का ता पय& दो और ितपिहया वाहनG, या@ी वाहनG, वािणिMयक वाहनG आ(cid:4)द से होगा।
घघघघररररेेललेेलल ुु ुु <<<<ततततरररर पपपपरररर ििििववववििििनननन====ममममतत(cid:19)(cid:19)तत(cid:19)(cid:19) ककककेेेे ििििललललएएएए पपपपाााा(cid:16)(cid:16)(cid:16)(cid:16)तततताााा हहहहततेेततेे ुु ुु अअअअपपपपििेेििेे????तततत <<<<थथथथााााननननीीीीयययय 66665555%%%%
ककककंंंंटटटट+ट+ट+ट+ट कककक@@@@ (cid:30)(cid:30)(cid:30)(cid:30)ििििततततशशशशतततत
2760 GI/2018 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
3333....2222 आआआआईईईई ससससीीीी इइइइंंंंजजजजनननन ववववााााहहहहनननन1111 हहहहततेेततेे ुु ुुऑऑऑऑटटटटोोोोममममोोोो////टटटटवववव घघघघटटटटकककक
(क) पFरभाषाः-
इस अिधसूचना के (cid:31)योजनाथ&, ऑटोमोFटव घटकG का ता पय& दो तथा ितपिहया वाहनG, या@ी वाहनG, वािणिMयक वाहनG आ(cid:4)द के
िविनमा&ण/ रख-रखाव हते ु अपेिOत घटक/पुजP से होगा।
घघघघररररेेेेलललल ुु ुु <<<<ततततरररर पपपपरररर ििििववववििििनननन====ममममतत(cid:19)(cid:19)तत(cid:19)(cid:19) अअअअननननुसुसुसुसाााारररर पपपपाााा(cid:16)(cid:16)(cid:16)(cid:16)तततताााा ककककेेेे ििििललललएएएए अअअअपपपपििेेििेे????तततत 66660000%%%%
<<<<थथथथााााननननीीीीयययय ककककंंंंटटटट++टट++टट कककक@@@@ (cid:30)(cid:30)(cid:30)(cid:30)ििििततततशशशशतततततततताााा
4. चूं(cid:4)क यह अिधसूचना त काल (cid:31)भावी होगी तथा 31.03.2019 के पSात इसक. समीOा क. जाएगी।
5. चूं(cid:4)क यह अिधसूचना संशोिधत अिधसूचना जारी होने तक वैध होगी।
6. <<<<थथथथााााननननीीीीयययय ककककंंंंटटटट++टट++टट////घघघघररररेेेेलललल ुु ुुममममBBूूBBूू ययययववववCCCCनननन(cid:19)(cid:19)(cid:19)(cid:19) कककक@@@@ गगगगणणणणननननाााा हहहहेतेतेतेत ुु ुु(cid:30)(cid:30)(cid:30)(cid:30)8888EEEEययययाााा
6.1 घरेलु िविनमा&ता% (डीओएम–बीओएम) से (cid:31)ाU सामVी के िबल क. गणना क. जाएगी, जो उपलWध डाटा पर िनभ&र, िनIिलिखत म(cid:27)
से (cid:4)कसी एक पर आधाFरत है। (cid:31) येक गणना िनरXतर पFरणाम देगी।
(क) सभी इनपुटG के लागत क. रािश जो उ पाद से संबंिधत ह ै (इंनपुटG क. खरीद पर लगाए गए कर तथा शु(cid:6) क सिहत उXह (cid:27) छोड़कर
िजसके िलए ऋण/ सेट-ऑफ िलया जा सकता ह)ै तथा िजXह (cid:27) (cid:31) यO \प से अथवा घरेलु ]ापाFरयG के मा^यम से अथवा िबचौिलये के
मा^यम से आयात नह_ (cid:4)कया गया ह।ै
(ख) उ पाद (इनपुटG क. खरीद पर लगाए गये शु(cid:6)क तथा करG सिहत उXह (cid:27) छोड़कर िजनके िलए ऋण/सेट-ऑफ िलया जा सकता ह)ै के
उ पादन म(cid:27) इनपुटG के \प म(cid:27) उपयोग क. गई ((cid:31) यO अथवा अ(cid:31) यO \प से) सामVी के आयाितत िबल के कर रिहत रािश के पSात
उ पाद का लाभ रिहत एaस फैabी मू(cid:6)य वारंटी लागत से कम ह।ै
(ग) बाजार मू(cid:6)य से कम उ पादन पSात मालभाड़ा, बीमा तथा अXय रख-रखाव लागत से कम उ पाद (इनपुट क. खरीद पर लगाए गए
शु(cid:6)क तथा करG सिहत, उXह (cid:27) छोड़कर िजनके िलए ऋण/ सेटऑफ िलया जा सकता ह)ै के उ पादन म(cid:27) आदानG के \प म(cid:27) (cid:31)यु> सामVी के
आयाितत िबल क. वारंटी लागत रिहत रािश, बाजार मू(cid:6)य रिहत माल भाड़ा, बीमा तथा अXय रख-रखाव लागत रिहत कर पSात लाभ,
तथा िवपणन खच& से कम ह।ै
6.2 सामVी के कुल िबल (कुल- बीओएम) क. गणना उपलWध डाटा पर िनभ&र िनIिलिखत म(cid:27) से (cid:4)कसी एक के आधार पर क. जाए। इनम(cid:27) से
(cid:31) येक गणना िनरXतर पFरणाम दगे ी।
(क) सभी इनपुcस के लागत क. रािश जो उ पाद से संबंिधत ह ै (इनपुटG क. खरीद पर लगाए गए शु(cid:6)क तथा करG सिहत, उXह (cid:27) छोड़कर
िजनके िलए ऋण/ सेट-ऑफ िलय़ा जा सकता ह।ै )
(ख) उ पाद कर पSात लाभ रिहत, वारंटी लागत रिहत एaस-फैaटरी मू(cid:6)य
(ग) बाजार मू(cid:6)य रिहत उ पादन पSात माल-भाड़ा, बीमा तथा अXय रख-ऱखाव लागत रिहत कर पSात लाभ, वारंटी लागत रिहत,
िवeय तथा िवपणन खच& रिहत।
6.3 िनIिलिखत फामु&ले के अनुसार तैयार क. गई सूचना के आधार पर घरेलु मू(cid:6)यवध&न क. (cid:31)ितशतता क. गणना क. जाए।
घरेलु मू(cid:6)यवध&न क. (cid:31)ितशतता = (डीओएम–बीओएम/ कुल- बीओएम) X 100
िसफाFरश क. जाती ह ै(cid:4)क आकलन करने वाली (cid:31) येक एज(cid:27)सी उपरो> म(cid:27) से कम से कम दो फामू&लG का उपयोग कर घरेलु #थानीय कंट(cid:27)ट/
मू(cid:6)यवध&न क. पFरगणना करे। िजससे इस सबंध म(cid:27) आकलन वैध हो सके तथा यह सुिनिSत कर सके (cid:4)क दावा (cid:4)कया गया घरेलु मू(cid:6)यवध&न
संगत ह।ै
7777.... <<<<थथथथााााननननीीीीयययय ककककंंंंटटटट+ट+ट+ट+ट//// घघघघररररेेेेललललु ु ु ु ममममूBूBूBूBययययववववधधधध(cid:19)न(cid:19)न(cid:19)न(cid:19)न ककककाााा (cid:30)(cid:30)(cid:30)(cid:30)ममममााााणणणणीीीीककककररररणणणण
(क) िनिवदा, बोली लगाने और (cid:31)लोभन के समय #थानीय सfलायर यह #व–(cid:31)माणन (cid:31)दान करेगा (cid:4)क (cid:4)दए गए उ पाद Xयूनतम #थानीय
कंट(cid:27)ट को पूरा करते हG तथा #थान अथवा #थानG का Wयौरा भी दगे ा, िजस #थान पर #थानीय मू(cid:6)यवध&न (cid:4)कया जाता ह।ै
(ख) h.10 करोड से अिधक मू(cid:6)य हेतु खरीद के मामले म(cid:27) #थानीय सfलायर कंपनी (कंपिनयG के मामल(cid:27) म(cid:27)) को सांिविधक लेखा परीOक
अथवा लागत लेखा परीOक से अथवा अiयास करने वाले चाट&ड & एकाउXटेXट (कंपिनयG के अलावा सfलायर के मामल े म(cid:27)) अiयास करन े
वाले लागत एकाउXट(cid:27)ट से #थानीय कंटेट का (cid:31)ितशत देने वाला (cid:31)माण प@ (cid:31)दान करेगा।¹Hkkx IIµ[k.M 3(ii)º Hkkjr dk jkti=k % vlk/kj.k 3
(ग) झूठी घोषणाएं सामाXय िवjीय िनयमावली के िनयम 175 (1)(आई)(एच) के तहत स यिनkा का उ(cid:6)लंघन हGगे, िजसके िलए बोली
दाता अथवा उसके उjरािधकाFरयG को सामाXय िवjीय िनयमावली के िनयम 151 (iii) के अनुसार दो वषP के िलए िनषेध (cid:4)कया जा
सकता ह।ै साथ ही ऐसी अXय काय&वािहयां क. जा सकती ह,m जो कानून के तहत अनुमत ह।m
8. भारी उ+ोग एवं लोक उ+म मं@ालय ऑटोमोFटव उ पाद अिधसूचना के काया&Xवयन क. िनगरानी के िलए नोडल मं@ालय होगा।
[फा. सं. 12(39)2018–एईआई/15446]
(cid:31)िवण अVवाल, संयु> सिचव
MINISTRY OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES
(Department of Heavy Industry)
NOTIFICATION
New Delhi, the 18th May, 2018
S.O. 1987(E).—Public Procurement (Preference to Make in India) Order 2017—Notifying Automobile
and Automotive Components in furtherance of the Order
Reference: Department of Industrial Policy & Promotion (DIPP) Notification No.P-45021/2/2017-B.E.-II dated
15.06.2017
Whereas, the Government has issued Public Procurement (Preference to Make in India) Order 2017 vide the
Department of Industrial Policy & Promotion (DIPP) Notification No.P-45021/2/2017-B.E.-II dated 15.06.2017 to
encourage ‘Make in India’ and to promote manufacturing and production of goods and services in India with a view to
enhancing income and employment.
2. Whereas, in furtherance of the Public Procurement (Preference to Make in India) Order 2017 notified vide
reference cited above, the Ministry of Heavy Industries & Public Enterprises (HI&PE) hereby notifies that preference
shall be provided by all Government Procuring Entities to domestically manufactured Automobile and Automotive
Components as per the aforesaid Order.
3. Whereas, following Automobile and Automotive Components are notified under the Public Procurement
(Preference to Make in India) Order 2017:
3.1. Automobiles based on Internal Combustion Engines
Definition:
For the purpose of this Notification, Automobiles would mean two & three wheelers, passenger vehicles, commercial
vehicles etc.
Percentage Local Content required to qualify as 65%
domestically manufactured
3.2. Automotive Components for Internal Combustion Engine Vehicles
Definition:
For the purpose of this Notification, Automotive Components would mean components/spares required for
manufacture/maintenance of two & three wheelers, passenger vehicles, commercial vehicles etc.
Percentage Local Content required to qualify as 60%
domestically manufactured
4. Whereas, the Notification comes into effect immediately and would be reviewed after 31-03-2019.
5. Whereas, this Notification shall remain valid till a revised Notification is issued.
6. Procedure for calculating local content/ domestic value addition
6.1 Bill of Material sourced from domestic manufacturers (Dom-BOM) may be calculated based on one of the followings
depending on data available. Each of these calculations should provide consistent result.
a. Sum of the costs of all inputs which go into the product (including duties and taxes levied on procurement of
inputs except those for which credit/set-off can be taken) and which have not been imported directly or through a
domestic trader or an intermediary.4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
b. Ex-Factory Price of product minus profit after tax minus sum of imported Bill of Material used (directly or
indirectly) as inputs in producing the product (including duties and taxes levied on procurement of inputs except those for
which credit/ set-off can be taken) minus warranty costs.
c. Market price minus post-production freight, insurance and other handling costs minus profit after tax minus
warranty costs minus sum of Imported Bill of Material used as inputs in producing the product (including duties and
taxes levied on procurement of inputs except those for which credit / set-off can be taken) minus sales and marketing
expenses.
6.2 Total Bill of Material (Total-BOM) may be calculated based on one of the following depending on data available.
Each of these calculations should provide consistent result.
a. Sum of the costs of all inputs which go into the product (including duties and taxes levied on procurement of
inputs except those for which credit / set-off can be taken).
b. Ex-Factory Price of product minus profit after tax, minus warranty costs.
c. Market price minus post-production freight, insurance and other handling costs minus profit after tax, minus
warranty costs minus sales and marketing expenses.
6.3 The percentage of domestic value-addition may be calculated based on information furnished as per the following
formula:
Percentage of domestic value-addition = (Dom−BOM/Total−BOM) × 100
It is recommended that each agency assessing should calculate the domestic local content/value-addition using at least
two of the above formulae so as to validate the assessments in this regard and ensure that the domestic value addition that
is claimed is consistent.
7. Verification of local content/ Domestic Value Addition
a. The local supplier at the time of tender, bidding or solicitation shall provide self-certification that the item offered
meets the minimum local content and shall give details of the location(s) at which the local value addition is made.
b. In cases of procurement for a value in excess of Rs.10 crore, the local supplier shall provide a certificate from the
statutory auditor or cost auditor of the company (in the case of companies) or from a practising cost accountant or
practising chartered accountant (in respect of suppliers other than companies) giving the percentage of local content.
c. False declarations will be in breach of the Code of Integrity under Rule 175(1)(i)(h) of the General Financial
Rules for which a bidder or its successors can be debarred for up to two years as per Rule 151 (iii) of the General
Financial Rules along with such other actions as may be permissible under law.
8. MHI&PE shall be the Nodal Ministry to monitor the implementation of the Automotive Products Notification.
[F.No. 12(39)/2018-AEI (15446)]
PRAVIN AGRAWAL, Jt. Secy.
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