Make In India

The flaws in the Purchase Preference Policy (PPP) for Make In India (MII) is being abused by the suppliers. In a composite tender, they acquire the class-I local supplier status by artificially hiking price of local items, and by slashing (below their own cost) the price of items which has lower / zero level of local contents. Since they enjoy 20 per cent price advantage compared to the L1 bidder (class-II, or non-local supplier), during the reverse auction (RA) they don’t chase the L1 price tag and keep their prices at safe higher levels of upto 20 per cent. This is because, they don’t have the fear of losing the contract as they would have the first right of refusal to get the contract if they are ready to match the L1 price, which they finally do after the closing of RA process.