Public Procurement (Preference to Make in India) Order 2017- Notifying Cyber Security Products in furtherance of the Order

The Government has issued Public Procurement (Preference to Make in India) Order 2017 vide the Department of Industrial Policy and Promotion (DIPP) Notification No.P-45021/2/2017-B.E.-II dated 15.06.2017 to encourage ‘Make in India’ and to promote manufacturing and production of goods and services in India with a view to enhancing income and employment.
 In furtherance of the Public Procurement (Preference to Make in India) Order 2017 notified vide reference cited above, the Ministry of Electronics and Information Technology (MeitY) hereby notifies that preference shall be provided by all procuring entities to domestically manufactured/ produced Cyber Security Products as per the aforesaid Order.
For the purpose of this Notification, Cyber Security Product means a product or appliance or software manufactured/ producedfor the purpose of maintaining confidentiality, availability and integrity of Information by protecting computing devices, infrastructure, programs, data from attack, damage, or unauthorized access.
In addition to being an Indian registered / incorporated entity, and supplying products should satisfy the conditions of IP ownership as under:
IP Ownership rights would need to be substantiated by adequate proof, such as (a) adequate documentation evidencing ownership(evidenced by supporting proof such as documentation related to development but not limited to IP assignments, shrink wraps, license agreements, click wraps); OR (b) IP registrations. It may be noted that IP registrations is not a compulsory criteria as it is not necessary to register to exercise copyright in India.

DEMAND DRIVEN INNOVATION: LEARNING FROM CHINA

In India, we think preferential treatment to local innovation is stupid economics and sinful global behavior. How did the Chinese manage to support local innovations with a public procurement policy consistent with international treaties? Some excerpts from the PhD Thesis of Radomir Tylecote.

• The Chinese government has created demand-side innovation policies to help give indigenous innovators a favourable environment, including procurement preference for domestic innovative products, and technical standard-setting.
• In 1992, Beijing published the Government Procurement Law, mandating (with exceptions) that government procurement purchases should be limited to domestic products , with support for enterprises used to support those which purchase domestic high technologies.
• In public procurement, the World Trade Organisation’s Government Procurement Agreement (GPA) does not apply to all government procurement, and GPA coverage to each member state is based on negotiation (WTO members are not yet required to join the GPA, and China is currently negotiating GPA accession, meaning it can include preferences for domestic goods and companies in state procurement practices.
• Procurement policy was reinforced from January 2005, as the Ministry of Industry and Information Technology (MIIT) issued the Opinion on Accelerating the Large Company Strategy in the Electronics and Information Industry, stating that support should be provided “to the leading large companies”.
• In 2009 the Circular on Carrying out the Work on Accreditation of National Indigenous Innovation Products, (a.k.a. Circular 618, by MOST, the NDRC, and the MOF) created a national-level “catalogue” of preferred procurement products in the six high-tech areas of computing and application equipment, communications, modern office equipment, software, new energy, and high-efficiency and energy-saving products.
•   An upgraded catalogue following the Circular listed 240 forms of industrial equipment in 18 areas that Chinese firms are encouraged to manufacture, to upgrade China’s manufacturing base, including solar PV. Participating firms were offered subsidies and tax incentives, alongside priority in procurement. 
• This was followed in November 2009 by the Indigenous Innovation Product Accreditation Policy, whereby state-procured products had to contain Chinese IP. Beijing’s municipal procurement catalogue contained 42 products and just one from a foreign-invested manufacturer; Shanghai’s had 258, with two from foreign-invested firms; Nanjing’s list had none. 
• These initiatives have been pursued in different ways by different levels of state. Procurement has built a platform to take Chinese firms from early innovation to market entry, and demonstrates a more direct approach among local government, and province-level cities in particular (the four major municipalities of Beijing, Shanghai, Tianjin and Chongqing) in supporting their high tech firms.

·       The indigenous IP issue fizzled out in 2011, but it had become entrenched in many people’s minds.

AP government offers commercial orders (post-project) to innovators

India Innovators often complain that for all their efforts, they often get awards but no rewards. Public procurement still has no place for commercial products/ solutions developed by Indian innovators. AP Govt now offers start-ups the lifeline in the form of preferential market access, valued upto Rs 50 crores annually. As per the policy:
Eligibility: (Any Startup/ MSME/Enthusiastic First Generation Technocrats/ Entrepreneurs from Andhra Pradesh, with an annual turnover between Rs 50 lakhs and Rs.25 cr, in Electronics and IT sectors can apply with suo moto proposals.
subjects/themes:  Identity and Access Management, e-Service Delivery, Cloud services, Knowledge Management, Software Defined Networks, Social Benefits Management Systems, Project Portfolio Management, Location Based services, Disaster Management, GIS-based applications in the areas of Urban Development, Agriculture & Rural Development, Water Resources Management, Mines & Minerals, Forest & Environment, Disaster Management, Tourism Development, Development of GIS Databases & Layers, Traffic Management, Management of Utilisation of various assets through the use of GIS, Government/ Community lands Management (Section D6 of the Blueprint) , Localization Products and Tools namely, content development in Telugu and thereby bridging the digital divide, development of language technologies for text to speech and speech to text, voice recognition, machine translation, voice web, to enable language independent delivery of services. (Section D3 of the Blueprint), Use of Social Media by Government agencies in lines with the Framework and Guidelines by GoI.(Page 37 of the Blueprint).