India to sign defense contracts valued below INR 200 Crore with local firms

  • Our Bureau
  • 07:08 AM, May 21, 2020
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India to sign defense contracts valued below INR 200 Crore with local firms
India's Tejas fighter

The Indian Defense Ministry will sign contracts valued equal to or less than INR 200 crore ($23.4 million) with only local firms.

“In government contracts (procurements), global tenders of INR 200 crore or less will not be allowed. This will help MSMEs to grow their business,” Rajnath Singh, Defense Minister of India said Thursday.

A day earlier, the defense ministry announced a list of 26 items the country has to purchase only from local companies. All the items identified are used in shipbuilding.

India to sign defense contracts valued below INR 200 Crore with local firms

“Under this order, Department of Defence Production (DDP), Ministry of Defence has so far notified 127 items where purchase preference is given to local suppliers as per PPP-MII 2017. In order to further encourage procurement from local suppliers, 26 items out of 127 already notified, have now been notified under clause 3(a) of the Public Procurement (Preference to Make in India) Order 2017 and henceforth, procuring entities shall procure these items only from local suppliers, irrespective of purchase value, provided that the local suppliers meet the Minimum Local Content (MLC) as prescribed for each item,” the ministry said in a release.

India to sign defense contracts valued below INR 200 Crore with local firms

India’s $265.2 Billion Package

Last week, the country’s finance ministry announced a whopping $265.2 billion (INR 20 lakh crore) package to revive the country’s slowing economy. The package, equivalent to 10% of India’s GDP, includes both fiscal and liquidity measures to make India self-reliant under the “Aatmanirbhar Bharat Abhiyan.”

Reforms in the defense sector are primarily focussed on building indigenous military equipment and curbing imports as much as possible.

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