“We are also going to use the preferential purchase rules laid down by the finance ministry to purchase medical devices from domestic manufacturers for government tenders. This could finally be in place by next month,” a senior official of the department said.
According to the rules on preferential purchase, any ministry or department can make mandatory the procurement from a domestic manufacturer on grounds of promoting locally manufactured products. The general financial rules are just guidelines, and ministries and departments can use them to encourage the Indian industry.
Domestic manufacturers have been asking the government not to go by only the lowest bid in government tenders. Recently, the oil ministry, the steel ministry and the electronic ministry utilised these rules to give their sectors a boost. The domestic manufacturers’ lobby, Association of Indian Medical Devices industry (AIMED), has been asking the government to impose severe penalty on foreign companies that do not provide quality products.
The domestic medical devices industry has been asking the government to have such a procurement policy that will help it compete with Chinese products. The AIMED feels that since China has a favourable business environment for medical devices manufacturing, Chinese products are cheaper compared to Indian products. This makes it difficult for Indian companies to have bids lower or equal to the Chinese, they argue.
The government is, meanwhile, working on a separate medical devices policy that will facilitate and encourage domestic manufacturing. At present, 70% medical devices are imported.
A ministry or department can make procurement from domestic manufacturer mandatory
Domestic producers want govt to not go by only lowest bid
Oil and steel ministries have used the rules to give their sectors a boost
70% of medical devices are imported