MTaI statement on the revised Public procurement Order:
1. What is the reaction of MTal on this?
MTaI feels disappointment that despite the assurance of the Ministry of commerce that no PPOs will come without proper analysis of local market capacity, we are still seeing such a notice, which on first reading, seems to be made without quality due diligence, without a thoroughly consultative process and without a sense of equity towards all local manufacturers.
2. Would this encourage investments in setting up manufacturing plants here?
We prima facie feel that this will be a regressive step, as this could further push down FDI investment which has just picked up pace primarily due the undespairing spirit of the Global investors.
The Global companies contribute most of the investment which comes into Manufacturing in India. As shown in the chart enclosed, FDI which was just $62 M annually, took on an upward trajectory due to the announcement of the automatic route (which was advocated by our companies) in 2015. In 2016 (the first full year after the announcement) the FDI shot to $439 Million and would have increased even further. Due to the unintended consequences of some well-intentioned but non-thorough policies, FDI dropped to $184 million in 2017 and reached $ 66 M in 2018. Encouraged by our honourable Prime Minister, we picked up the threads again in 2019 and 2020 and our efforts have started bearing fruits again, as shown in the chart. Whether this will sustain will depend on the quality of policy and the sensitivity to the greatest contributing cohort.
3. Of the total market size, what is the share of public procurement?
The latest figures are being worked out. While we await that, MTaI would like to underline the fact that central government hospitals also cater to the under privileged. And changing the quality of inputs that they have been getting without a high quality due diligence puts all their clients to avoidable risk. Moreover these hospitals are also involved in the training and research for many doctors in our country and by depriving them of latest and proven technologies without a through analysis could regress India’s MedTech development.
Coverage in Business Standard: March 27, 2021
