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Why does the govt want ‘country of origin’ flagged on procurement portal? How will you be impacted?

Decision comes after the Aatmanirbhar Bharat push and the tensions with China, which is a source of many commonly used goods. There is also a move to extend this requirement to private e-commerce platforms.

Written by Prabha Raghavan , Edited by Explained Desk | New Delhi |
Updated: June 25, 2020 9:59:18 am
A product sold on the government portal that indicates the country of origin

The government on Tuesday (June 23) made it mandatory for sellers on the Government e-Marketplace (GeM) portal to clarify the country of origin of their goods when registering new products.

The Department for Promotion of Industry and Internal Trade (DPIIT) is learnt to be actively examining a similar proposal for products listed on private e-commerce platforms, and is expected to hold a meeting with them later on Wednesday (June 24).

What does this mean for goods sold on the GeM Portal?

Sellers on the GeM portal, which is the Commerce Ministry’s online marketplace for procurement of goods and services by various Ministries and government bodies, will now have to disclose the origins of their products. The portal also has a ‘Make in India’ filter, and government offices will be able to ascertain which products have a higher content of indigenously produced raw materials.

This would help them choose products that meet the ‘minimum 50 per cent local content’ criterion when selecting bidders for their tenders —procurement norms amended by the government earlier this month categorise suppliers based on the level of local content in their goods.

The GeM portal now allows buyers to reserve a bid for Class I local suppliers, or suppliers of those goods with more than 50 per cent local content. For bids below Rs 200 crore, only Class I and Class II (those with more than 20 per cent local content) are eligible.

Why is all of this happening?

The decision comes in the backdrop of the Narendra Modi government’s push for an “Aatmanirbhar Bharat”, which intends to promote self-reliance by boosting the use of locally produced goods. It also follows the deadly clashes between Indian and Chinese troops in Galwan Valley on June 15, which have prompted several government departments to launch an offensive against imports from China.

At $ 70.32 billion in 2018-19 and $ 62.38 billion between April 2019 and February 2020, China accounts for the highest proportion of goods imported into India (around 14 per cent in 2019-2020 so far).

In the case of private e-commerce firms, the demand for a country of origin tag is being pushed by a traders body known as Confederation of All India Traders (CAIT). According to CAIT, most e-commerce companies have been selling Chinese goods “in large percentages”.

How will ordinary consumers in India be impacted?

The requirement to announce the country of origin of products sold on the GeM portal, coupled with the government’s Make in India campaign and Aatmanirbhar push, may over time filter out imported goods from use in government offices and facilities.

Products sold on the GeM portal range from stationery used by government officials to medical products that are used on patients — and this might provide an opportunity to Indian manufacturers across industries to push their products in government facilities.

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A more direct impact may be seen if the proposal to mandate the country of origin for products on private platforms is implemented.

Such a decision is expected to lend more clarity to consumers on where their products are made, allowing them to make a better decision on whether they want to purchase this specific brand of the product or opt for a different one.

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