‘The price offered by Chinese vendors is usually 40-50% lower compared to what local suppliers offer, which renders irrelevant the 20% purchase preference advantage stipulated for the latter under the Make in India scheme.’
Noor Mohammad writes …..Suppliers, who have set up manufacturing facility under the Make in India programme, are entitled to 20% purchase preference in public procurement. That means they will be given contract provided the bid price differential is less than 20% and they are ready to match the offer of the lowest bidder, a foreign vendor.
But despite that, local suppliers are being outbid by Chinese vendors. The reason: price offered by Chinese vendors is usually 40-50% lower compared to what local suppliers offer, which renders irrelevant the 20% purchase preference advantage stipulated for the latter under the ‘Make in India’ scheme.
Plasser India, a manufacturer of track-laying and maintenance machines is operating in India since 1965. It already has one manufacturing unit in Haryana.
It decided to set up another manufacturing unit in Vadodara with investment of Rs 400 crore to benefit from sops available under the Make in India. The facility is expected to be operational by next March. However, it failed to match up to Chinese competition in two recent tenders.
Siegfried Fink, managing director of Plasser India, wants the government to introduce 50% mandatory localisation to level the playing field for companies that have set up manufacturing facilities here.
It was lure of this kind of demand that led companies like Plasser India into expanding their manufacturing capacity here. But now their optimism is fading fast as they see the reality.