Ministry of Power Revises Local Content Requirements in Power Distribution Components

The MOP added that this was to promote to “Make in India” program


The Ministry of Power (MoP) has issued a public procurement order with revised requirements for locally made components in electrical equipment used in the power distribution center.

The Ministry issued the order on March 17, 2020, through a Department for Promotion of Industry and Internal Trade (DPIIT) notification to promote the “Make in India” program. It added that this requirement was to boost domestic manufacturing and production of goods and services while enhancing income and employment.

It stated that all procuring entities are to abide by the guidelines issued in the order and adhere to the minimum local content requirement parameters prescribed below:

Ministry of Power_Revised Minimum Local Content Requirement for Electrical Equipment Used in Distribution Sector

The Ministry added that for sub-stations 33/11 kV and lower, constructed on a turnkey or an engineering, procurement, and construction (EPC) contract basis, the local content percentage must be 80% of the total cost of civil supply and labor for civil and supply labor. For electricity supply, the requirement will be based on individual components instead of one fixed percentage for the entire electrical supply package.

Recently, the Ministry of new and Renewable Energy (MNRE) said strict action would be taken against those solar project developers that are using imported solar cells and modules to develop projects under the Domestic Content Requirement (DCR) category. Punishment will range from the filing of criminal cases under the Indian Penal Code, blacklisting of developer for ten years, forfeiting of relevant bank guarantees, and disciplinary cases against the concerned government official. It is a known fact that manufacturers have been importing solar components and mislabeling them to be used for DCR projects for a long time.  MNRE had issued an order in 2018 to curb this practice, but not much has happened since then.

In 2018, the MNRE issued a memorandum for the implementation of public procurement in the renewable energy sector giving preference to ‘Make in India’ products. This was in response to the central government’s order, issued by the Department of Industrial Policy and Promotion (DIPP) to promote the manufacturing and production of goods and services in India to improve income and employment in the country.