As per the Government of India, Ministry of Commerce and Industry, Department of Industrial Policy and Promotion’s Public Procurement (Preference to Make in India), Order 2017, purchase preference is to be given to local suppliers (those with minimum local content – normally 50%) in all procurements undertaken by procuring entities of Central Government (Ministries, Departments and CPSUs) in the manner specified hereunder:

1. In procurement of goods in respect of which the Nodal Ministry (these have been nominated by DIPP and Min of Fin) has communicated that there is sufficient local capacity and local competition, and where the estimated value of procurement is Rs. 50 lakhs or less, only local suppliers shall be eligible.
2. If the estimated value of procurement of such goods is more than Rs. 50 lakhs, among all qualified bids, the lowest bid will be termed as L 1.

a) If L 1 is from a local supplier, the contract for full quantity will be awarded to L 1.
b) If L 1 bid is not from a local supplier, Subject to the condition the ‘lowest-bidder-among-the-local suppliers’ quoted price falls within the margin of purchase preference (20% from L1 or as specified otherwise) and is also willing to match the L 1 price:

a. In case the subject matter of procurement is divisible, 50% of the order quantity shall be awarded to L 1 and such ‘lowest-bidder-among-the-local suppliers’ (or if he is unwilling other willing local supplier down the line on similar conditions) would be awarded remaining 50% quantity at L1 price. In case some quantity is still left uncovered on local suppliers, then such balance quantity may also be ordered on the L 1 bidder.
b. In case the subject matter of procurement is NOT divisible or in procurement of services where the bid is evaluated on price alone, full quantity may be awarded to ‘lowest-bidder-among-the-local suppliers’ meeting the conditions mentioned above (or if he is unwilling other willing local supplier down the line on similar conditions).

The minimum local content, the margin of purchase preference and the procedure for preference to Make in India shall be determined by the Nodal Ministries and specified in the notice inviting tenders or other form of procurement solicitation and shall not be varied during a particular procurement transaction. The local content would be based on self-declaration of the bidder. In case of these being found to be false, as per complaint of stakeholders, there is stringent provision of debarment of such bidders.

The relevant URLs are:

DIPP Order: http://dipp.nic.in/sites/default/files/publicProcurement_MakeinIndia_15June2017.pdf