Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment
Country of Origin On Government e-Marketplace
Context: The government on 23 June 2020 made it mandatory for sellers on the Government e-Marketplace (GeM) portal to clarify the country of origin of their goods when registering new products.
What is GeM?
GeM is a one-stop National Public Procurement Portal to facilitate online procurement of common use Goods & Services required by various Central and State Government Departments / Organizations /Public Sector Undertakings
It was launched in 2016 to bring transparency and efficiency in the government buying process.
It operates under the Ministry of Commerce and Industry.
GeM is a completely paperless, cashless and system driven e-market place that enables procurement of common use goods and services with minimal human interface
What are the new guidelines?
Sellers on the GeM portal will now have to disclose the origins of their products.
The portal also has a ‘Make in India’ filter, and government offices will be able to know which products have a higher content of indigenously produced raw materials.
This would help government agencies choose products that meet the ‘minimum 50 per cent local content’ criterion when selecting bidders for their tenders
The GeM portal now allows buyers to reserve a bid for Class I local suppliers, or suppliers of those goods with more than 50 per cent local content.
For bids below Rs 200 crore, only Class I and Class II (those with more than 20 per cent local content) are eligible.
Significance of the move
The move is aimed at promoting India-made goodsandin line with government’s push for self-reliance (Atmanirbhar Bharat Mission)
Products sold on the GeM portal range from stationery used by government officials to medical products that are used on patients — and this might provide an opportunity to Indian manufacturers across industries to push their products in government facilities.
It may over time filter out imported goods from use in government offices and facilities
Weaponisation of trade ties in the wake of recent border tensions with China
India wants to reduce its economic dependence on China so that China doesn’t use its economic might as a leverage against India during crisis times
At $ 70.32 billion in 2018-19 and $ 62.38 billion between April 2019 and February 2020, China accounts for the highest proportion of goods imported into India(around 14 per cent in 2019-2020 so far)
Critical Analysis of the move
The GeM move on country of origin is at best symbolic.
This may erode Indian industry’s global competitiveness by placing a premium on ‘Indianness’ over quality or cost.
A more direct impact may be seen if the proposal to mandate the country of origin for products on private platforms is implemented.
Attaining genuine self-reliance is a long and capital intensive process that would require far greater investment in education, skill-building and infrastructure.
This may furtherescalate tension with China transcending the boundary misunderstanding into trade war which may not be in India’s interest. For Ex: India’s drug makers depend on China for nearly 70% of requirements of bulk drugs and intermediates.
Conclusion
Enhancing manufacturing capacities with improved efficiency and reduced cost would require an overhaul of bureaucratic processes rather than mere tweaking of government procurement rules
Connecting the dots:
Critical analysis of Atmanirbhar Bharat Mission and its financing
