information-about-country-of-origin-made-mandatory-on-gem

Context: The Government e-Marketplace (GeM) has made it mandatory for the sellers to disclose the country of origin on the products they wish to sell over the platform. 

More on News:

  • The move has been taken in the backdrop of rising agitation against Chinese goods and for boosting the Make in India campaign.
    • 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.
  • It is also in sync with the slogan of ‘Vocal for Local’, given by the PM under Atmanirbhar Abhiyan, which intends to promote self-reliance by boosting the use of locally produced goods.

Changes Made:

  • The disclosure about the country of origin is for both - new and old sellers. The product will be removed from the platform upon failure of disclosure.
  • Along with the country of origin, the local content percentage will also be shown.
  • Buyers can use ‘Make in India’ filter and bid only for Class 1 manufacturers (Products having more than 50% local content)
  • For the bids lower than Rs. 200 crores, only Class 1 and Class 2 (More than 20% Local Content) manufacturers are eligible to bid.

The utility of GeM:

  • Since its origin, the portal is continuously working towards the promotion of the ‘Make in India’ initiative.  
  • It has facilitated the entry of small local sellers in Public Procurement while implementing MSE Purchase Preference Policies of the Government in the true sense. 
  • It has enabled quick, efficient, transparent and cost-effective procurement, especially in the current scenario of COVID pandemic when products are urgently required by Government organizations.  

Concerns behind the present move:

  • Defining ‘Country of Origin’ is very difficult as products are assembled in a country while its components are imported from other places.
    • Eg - iPhone is assembled in China while its components are provided by U.S, South Korea Japan and Taiwan.
  • It portrays India as a Protectionist Country which might undermine the benefits of free trade in the near future.
  • Further, a Price rise might be observed if cheap imports are not there leading to inflation in the economy.
  • Earlier policy of Import Substitution had not yielded fruitful results for India. 

Conclusion:

Such a decision will help consumers know their product’s source of origin and gradually help in curbing the huge trade deficit with China. However, a more direct impact may be seen if the proposal to mandate the country of origin for products on private platforms is implemented in the future.

Government e-Marketplace (GeM):

  • It is a digital marketplace under Commerce Ministry where common user goods and services can be procured in a paperless and cashless way with minimal human interface.
  • It is a dynamic, self-sustaining and user-friendly portal for making procurement by Government officers.
  • DGS&D (Directorate General of Supplies and Disposals) with technical support of the National e-Governance Division (Ministry of Electronics and Information Technology) has developed the GeM portal for procurement of both Products & Services.  
  • The portal was launched on 9th August 2016 by the Commerce & Industry Minister.
  • The GeM 2.0 was launched as a pilot project in August 2016 and its success led to the conceptualisation of GeM 3.0.
    • The new portal will offer standardised and enriched catalogue management, powerful search engine, real-time price comparison, template-based Bid, online vendor assessment, multi-cart functionality, demand aggregation etc.
  • The purchases through GeM by Government users have been authorized and made mandatory by the Ministry of Finance.

Source:

https://pib.gov.in/PressReleasePage.aspx?PRID=1633511#:~:text=Government e-Marketplace (GeM),all new products on GeM.

https://indianexpress.com/article/explained/why-does-govt-want-country-of-origin-flagged-on-procurement-portal-how-will-you-be-impacted-6474118/

https://indianexpress.com/article/opinion/editorials/india-china-dispute-economic-crisis-country-of-origin-of-products-6476469/

Image Source: India.gov.in