‘India First’ policy emits China out of GAIL pipeline projects worth Rs 3,000 crore

The central government has adopted an 'India first' policy for official procurement, as a result of which Chinese companies have been ejected from pipeline projects worth Rs 3,000 crore that the state-run GAIL India Ltd is building.

This has given a big boost to the indigenous steel firms while also carrying forward PM Modi's mission of 'Make in India'.

The policy would result in Indian steel firms getting orders worth tens of billions of dollars without losing business to cheaper Chinese competition.

GAIL India is imposing the guidelines of the policy to prefer domestic products over imports on all present and future tenders.

This preference for Indian firms would most probably extend beyond the steel and power sectors; however, the government has to be careful that while preferring Indian firms, no international commitments are violated.

The conditions to choose domestic firms are that the projects should b worth more than Rs 50 crore, the quality or quantity should be locally available, and there should be no more than a 15% value addition in India.

"This is a new and novel idea to see how we can increase consumption (of domestic steel). These guidelines will be incorporated in any tender in the future," Steel minister Chaudhary Birender Singh told ET.

He added that in order to choose foreign firms for orders in case there is a transfer of technology, the government would invite these firms to set up a plant in India.

The move has come as a ‘tit for tat’ for China, where Indian firms are barred from bidding. Similar steps have been taken by power minister Piyush Goyal, who opines that business relations should be based on reciprocity, and if China doesn’t want Indian firms to bid for its projects, India won’t allow Chinese firms to bid for Indian projects.

China also has a history of dumping steel in India at low cost since it has a huge surplus; however, this cheaper alternative has proved to be harmful for Indian firms.

(Image source Export Trust)