No global tenders for govt purchases up to Rs 200 crore, says FM Nirmala Sitharaman in move to support MSMEs


The move to bar global procurement tenders in cases of government purchases up to Rs 200 crore is largely aimed at boosting the business of India’s Micro, Small and Medium Enterprises.

The announcement on disallowing global tenders in purchases of up to Rs 200 crore was announced as part of a number of measures unveiled to support MSMEs on Wednesday

Tenders for government procurement will no longer be open for global companies in projects worth up to Rs 200 crore, Finance Minister Nirmala Sitharaman announced Wednesday. Sitharaman made the announcement as part of a slew of measures unveiled by the government to support the economy that’s taken a big hit because of the novel coronavirus pandemic.

The move to bar global procurement tenders in cases of government purchases up to Rs 200 crore is largely aimed at boosting the business of India’s Micro, Small and Medium Enterprises. The move to disallow global tenders for up to Rs 200 crore will level the playing field for MSMEs and cut out “unfair competition” from foreign companies, FM Sitharaman suggested while making the announcement Wednesday.

The decision, which will be formalised after necessary changes to existing law, means that foreign companies will no longer be able to bid for or take part in government procurement projects that are worth Rs 200 crore or less. This gap will be expectedly filled by local companies, boosting their ability to do business.

The move is also a step towards “self-reliant” India, a push that Prime Minister Narendra Modi focussed on during his address to the nation on Tuesday.

The announcement on disallowing global tenders in purchases of up to Rs 200 crore was announced as part of a number of measures unveiled to support MSMEs. FM Nirmala Sitharaman said today’s decisions are just one in a series of announcements that will be made over the next few days.

The announcements made today and those to be made in the coming days and other economic decisions taken in the recent past (including schemes to support the poor and boost liquidity in the market) are expected to add up to Rs 20 lakh crore, or around 10 per cent of India’s Gross Domestic Product.

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