Multinational Medtech Firms Push for Local Content Norm Changes in India
MNC medtech firms seek changes in local content norms for procurement
Business Standard
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Multinational medical device manufacturers in India are advocating for a revised formula to calculate local content for government procurement. This change aims to include research and development costs, potentially allowing more foreign firms to qualify as local suppliers under the public procurement orders (PPOs), which currently favor domestic manufacturers.
- 01MNC medtech firms are requesting changes to local content calculation for government procurement.
- 02The proposed formula includes R&D and maintenance costs in local content assessments.
- 03Current regulations require at least 50% local content for Class I suppliers.
- 04The new formula could enable more MNCs to qualify as local suppliers.
- 05Discussions with government departments have taken place regarding these changes.
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Indian affiliates of multinational medical device manufacturers are seeking modifications to the local content calculation used for government procurement under public procurement orders (PPOs). The proposed changes aim to include costs associated with research and development (R&D) and maintenance in the local content formula. Currently, local content is calculated based solely on the value of domestic components in relation to the total value of the device, excluding indirect taxes and including imported content. The industry is divided, as the existing regulations favor suppliers with at least 50% local content. The new formula could allow many MNCs, previously excluded from procurement opportunities, to qualify as local suppliers. This development follows consultations with the Department for Promotion of Industry and Internal Trade (DPIIT) and the Department of Pharmaceuticals (DoP). Government sources have confirmed receipt of the submissions, which are under review by the Ministry of Electronics and IT and DPIIT.
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If the proposed changes are implemented, more multinational companies could participate in government procurement, potentially leading to increased competition and innovation in the medical device sector.
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