What is the Make in India Certificate?
The Make in India Certificate is a declaration or certification that validates the percentage of local content in a product. It is a key requirement under the Public Procurement (Preference to Make in India) Order, 2017 (PPP-MII Order).
This initiative aims to promote manufacturing in India by giving purchase preference to local suppliers in government tenders and procurements. It is crucial for businesses looking to sell on the Government e-Marketplace (GeM) or participate in government contracts.
Supplier Categories based on Local Content
Suppliers are categorized into three classes based on the percentage of local content in their goods or services:
- Class-I Local Supplier: Local content is equal to or more than 50%. They get the highest preference in government tenders.
- Class-II Local Supplier: Local content is more than 20% but less than 50%. They are eligible to bid but get lower preference than Class-I.
- Non-Local Supplier: Local content is 20% or less. They are generally not eligible for Global Tender Enquiries (GTE) below ₹200 Crores.
Benefits of Make in India Certification
- Tender Preference: Class-I suppliers get purchase preference in government procurements.
- GeM Eligibility: Essential for listing products on the GeM portal and claiming MII status.
- Business Growth: Opens up opportunities in the vast public sector market.
- Brand Image: Enhances credibility and demonstrates commitment to the Indian economy.
Local Content Calculation & Documents
How to Calculate Local Content?
The formula for Local Content percentage is:
Local Content (%) = ((Total Cost of Product - Value of Imported Content) / Total Cost of Product) * 100
Note: Value added includes domestic raw materials, labor, overheads, and manufacturing costs incurred in India.
Documents Required
- Cost Sheet detailing domestic vs. imported components.
- CA Certificate (for bids > ₹10 Crores).
- Self-Declaration on company letterhead (for bids < ₹10 Crores).
- Company Registration details (PAN, GST, Udyam).
- Product details and HSN code.
Certification Process
The process depends on the value of the tender or procurement:
- For Bids below ₹10 Crores: A self-declaration by the supplier regarding the local content percentage is sufficient. This should be on the company's letterhead.
- For Bids above ₹10 Crores: A certificate from a statutory auditor or cost auditor (for companies) or a practicing cost accountant or chartered accountant (for other entities) is mandatory to certify the local content.
GeM & Tenders
On the GeM portal, sellers must declare the local content percentage for each product. Based on this declaration, the system automatically categorizes the product as Class-I or Class-II.
Important: Providing false information about local content is a serious offense. It can lead to debarment from government tenders for up to 2 years and other legal actions.
