The Make in India initiative was introduced to encourage domestic manufacturing, reduce dependence on imported products, generate employment and strengthen India’s industrial capacity. Government procurement has an important role in achieving these objectives because Central Government departments, ministries, public sector undertakings and government-controlled organisations purchase goods, services and works on a large scale. To encourage the purchase of products manufactured in India and services delivered through domestic resources, the Government introduced the Public Procurement (Preference to Make in India) Order, 2017, commonly known as the PPP-MII Order. This context provides preference to eligible suppliers whose goods, services or works contain the prescribed percentage of local content.
Businesses commonly use the term “Make in India Certificate” for a declaration or professional certificate confirming the percentage of local content in the goods, services or works offered in a government tender. However, there is no separate permanent certificate issued by the Government under the name “Make in India Certificate.” Depending on the tender value and its conditions, the bidder may have to submit either a self-certification or a local-content certificate issued by an eligible auditor, chartered accountant or cost accountant.
What Is a Make in India Certificate?
A Make in India Certificate generally refers to a document through which a bidder declares the percentage of domestic value addition in the goods, services or works offered under a government tender. It helps the procuring authority determine whether the bidder qualifies as a Class-I local supplier, Class-II local supplier or non-local supplier.
The certificate is different from registrations such as GST Registration, Udyam Registration and Startup India Recognition. It is normally prepared for a particular product, service, work, project or government tender. Therefore, a general declaration stating that an entire company is Make in India compliant may not be sufficient unless the local-content percentage of the specific product or service offered has been properly calculated and disclosed.
Is There Any Government-Issued Make in India Certificate?
The Government does not issue a separate Make in India Certificate merely because a company manufactures goods or provides services in India. Under the public procurement framework, the bidder is required to declare the percentage of local content at the time of participating in a tender. For tenders where self-certification is permitted, the bidder may submit a declaration on its official letterhead.
The declaration generally contains the bidder’s name, product or service description, local-content percentage, supplier category, location where domestic value addition takes place and confirmation that the information provided is true and correct. For high-value procurement, the local-content percentage may need to be verified by an authorised professional. In the case of a company, the certificate may generally be issued by its statutory auditor or cost auditor. In the case of a proprietorship, partnership firm, LLP or another non-company entity, it may be issued by a practising chartered accountant or practising cost accountant, depending on the tender conditions.
Legal Context Governing Make in India Certification
Make in India certification in government tenders is mainly governed by the Public Procurement (Preference to Make in India) Order, 2017. The purpose of this context is to promote manufacturing and production in India, increase domestic value addition, generate employment, support Indian suppliers and strengthen domestic supply chains.
The Order also allows the Government to use public procurement as a tool for industrial development. Different ministries and departments may prescribe higher local-content requirements or additional conditions for specific products, services or sectors. Therefore, businesses should always examine the latest tender document and applicable ministry notification before preparing the certificate.
Meaning of Local Content
Local content means the value added in India in relation to the total value of the product, service or work offered by the bidder. It represents the portion of the total value that has been created through Indian raw materials, domestic manufacturing, Indian manpower, local services, domestic subcontracting and other eligible activities carried out in India.
Unless a separate calculation method is prescribed by the concerned ministry or tender authority, local content may generally be calculated by deducting the value of imported content from the total value of the item and dividing the result by the total value of the item.
The general formula is:
Local Content Percentage =
(Total Value of Item – Value of Imported Content) ÷ Total Value of Item × 100
The total value is generally considered after excluding net domestic indirect taxes. The imported-content value may include the cost of imported components, imported finished goods and applicable customs duties.
Example of Local Content Calculation
Suppose a company offers machinery for ₹20 lakh, excluding applicable net domestic indirect taxes. The machinery contains imported components worth ₹7 lakh, including customs duties. The domestic value addition will be ₹13 lakh, which is calculated by deducting ₹7 lakh from ₹20 lakh.
The local-content percentage will therefore be 65%, calculated by dividing ₹13 lakh by ₹20 lakh and multiplying the result by 100. Since the local content is more than 50%, the supplier may ordinarily qualify as a Class-I local supplier, subject to any higher requirement prescribed for that product or sector.
Items Excluded from Local-Content Calculation
Not every cost incurred by a business in India can be treated as local content. Imported products purchased from an Indian dealer, reseller or distributor do not automatically become domestic content merely because the invoice has been issued by an Indian entity. The actual origin of the goods or components must be considered.
Similarly, merely repackaging, labelling, rebranding or refurbishing an imported product may not amount to sufficient domestic manufacturing or value addition. Imported components, finished imported goods, foreign licence fees, overseas royalty payments, technical charges paid outside India and the cost of foreign technical expertise may need to be excluded from local-content calculations. Where a trader or reseller supplies imported goods, the tender authority may also ask for a certificate from the original equipment manufacturer confirming the country of origin and the extent of domestic value addition.
Classification of Suppliers
Class-I Local Supplier
A Class-I local supplier is generally a supplier whose goods, services or works contain at least 50% local content. Such suppliers receive the highest level of preference under the public procurement framework. However, the concerned ministry may prescribe a local-content requirement higher than 50% for products or sectors where adequate domestic manufacturing capacity and competition are available.
Class-I status can provide an important advantage because some government tenders may be restricted only to Class-I local suppliers. These suppliers may also receive purchase preference where their price falls within the prescribed margin.
Class-II Local Supplier
A Class-II local supplier generally has local content of at least 20% but less than 50%. Such suppliers may be allowed to participate in government tenders where their participation is permitted. However, they do not ordinarily receive the same purchase preference available to Class-I local suppliers.
Class-II suppliers should carefully examine the tender conditions because some procurements may allow both Class-I and Class-II suppliers, while other tenders may be restricted only to Class-I local suppliers.
Non-Local Supplier
A non-local supplier is generally one whose goods, services or works contain less than 20% local content. Such suppliers may be allowed to participate in tenders where global participation is permitted or where the procurement conditions do not restrict participation to domestic suppliers. However, non-local suppliers usually do not receive purchase preference under the Make in India procurement framework.
Who Is Eligible to Obtain a Make in India Certificate?
Different types of businesses may submit or obtain a Make in India local-content certificate, provided their goods, services or works meet the prescribed local-content requirement. Eligible entities may include sole proprietorships, partnership firms, limited liability partnerships, private limited companies, public limited companies, startups, MSMEs, manufacturers, service providers, contractors, engineering companies and system integrators.
Indian subsidiaries and joint ventures of foreign companies may also claim local-supplier status if the product, service or work offered by them contains the required domestic value addition. Eligibility is not determined only by the nationality or legal structure of the entity. The actual local-content percentage and tender-specific conditions are more important.
Basic Eligibility Conditions
Actual Value Addition in India
The supplier must establish that a measurable portion of the product, service or work has been manufactured, produced, developed or performed in India. Domestic value addition may arise from Indian raw materials, local manufacturing, Indian manpower, domestic technical services and work performed through Indian subcontractors.
Merely importing a complete product and selling it through an Indian business does not create local content. The supplier must be able to demonstrate actual manufacturing, processing, assembly, development or service-related value addition in India.
Minimum Local-Content Requirement
The supplier must satisfy the minimum local-content percentage applicable to the category being claimed. A Class-I local supplier generally requires 50% or more local content, while a Class-II supplier generally requires at least 20% but less than 50%.
The concerned ministry or tender authority may prescribe a higher requirement for a particular product or sector. Therefore, a bidder should not rely only on the general percentages and must verify the conditions stated in the tender document.
Supporting Cost and Manufacturing Records
The local-content claim must be supported by proper records. The supplier should maintain details of domestic raw materials, imported components, customs duties, labour expenses, manufacturing costs, Indian subcontracting expenses, foreign royalty payments and technical charges.
Product-wise or contract-wise costing should also be prepared so that the local-content percentage can be verified. The information should match purchase invoices, import documents, books of accounts and manufacturing records.
Compliance with Tender Conditions
Every government tender may prescribe its own certificate format, supporting documents, local-content requirement and method of calculation. A certificate prepared for one tender may not automatically be accepted for another tender.
The bidder should carefully check the tender value, prescribed supplier category, local-content percentage, certification requirement, competent certifying professional and submission deadline. Failure to follow the prescribed format may result in rejection of the certificate or bid.
Accuracy of Declaration
The local-content declaration must be based on correct and verifiable information. Imported goods and components should not be presented as Indian content, and foreign payments should not be hidden while calculating domestic value addition.
An incorrect or false declaration may result in loss of purchase preference, rejection of the bid, financial penalties, cancellation of the contract or debarment from future government procurement.
Certification Requirement Based on Tender Value
Procurement Up to ₹10 Crore
For procurement up to ₹10 crore, the bidder is generally allowed to provide a self-certification declaring the percentage of local content in the goods, services or works offered. This declaration is normally submitted on the bidder’s letterhead and signed by an authorised signatory.
The bidder may also be required to mention the address of the manufacturing unit, service centre, project site or other location where domestic value addition is carried out. The declaration should clearly identify the product or service and the supplier category being claimed.
Procurement Above ₹10 Crore
Where the procurement value exceeds ₹10 crore, professional certification of local content may be required. In the case of a company, the certificate may generally be obtained from the statutory auditor or cost auditor of the company. For entities other than companies, including proprietorships, partnership firms and LLPs, the certificate may generally be obtained from a practising chartered accountant or practising cost accountant.
The professional may verify the product costing, bill of materials, import documents, domestic purchases, manufacturing records and foreign payments before confirming the local-content percentage. A high-value contract may also require a professionally certified local-content statement at the execution or completion stage to confirm that the supplier actually achieved the declared percentage.
Documents Required for Make in India Certification
Business Documents
The applicant may be required to provide basic business documents such as the Certificate of Incorporation, LLP Incorporation Certificate, Partnership Deed, PAN Card, GST Registration Certificate and Udyam Registration Certificate, wherever applicable.
Details of the registered office, manufacturing unit and authorised signatory may also be required. A board resolution, authority letter or power of attorney may be requested to verify that the person signing the declaration is properly authorised.
Manufacturing and Operational Documents
Manufacturing businesses may need to provide their factory licence, manufacturing-unit address proof, production-process flow chart and details of machinery and equipment installed at the unit.
Raw-material purchase invoices, domestic supplier details, job-work agreements, labour records, subcontracting documents and production records may also be examined. Where imported goods or components are used, import invoices and bills of entry should be provided.
Financial and Costing Documents
The local-content percentage is mainly based on product-level or contract-level costing. Therefore, the applicant may need to submit a detailed bill of materials, product costing sheet, imported-content statement and domestic-content statement.
Customs-duty records, foreign royalty payments, overseas licence fees, technical-service charges, audited financial statements and cost audit records may also be required. The figures mentioned in the certificate should be supported by the books of accounts and other reliable records.
Tender-Specific Documents
Tender-specific documents may include the tender document, bid number, description of the product or service, quantity offered, HSN or service classification and total quoted value.
The bidder should also provide the prescribed certificate format, local-content requirement, supplier-category details and the location where local value addition takes place. Where a tender provides its own format, the certificate should be prepared strictly according to that format.
Process for Obtaining a Make in India Certificate
Examination of Tender Conditions
The first step is to examine the tender document carefully. The business should identify the required supplier category, minimum local-content percentage, tender value, certificate format and the authority authorised to issue the certificate.
The bidder should also verify whether only Class-I local suppliers are eligible or whether Class-II suppliers may also participate. The requirement of self-certification or professional certification should be checked before preparing the documents.
Identification of Product, Service or Work
The certificate should clearly relate to the specific product, service, project or work offered under the tender. The local-content calculation should not be based on the general operations or total turnover of the company.
Where multiple products are offered, separate calculations may be required for each product. In some cases, a weighted-average method may be used if permitted by the tender conditions.
Preparation of Bill of Materials
For goods, the business should prepare a detailed bill of materials showing domestic and imported components. The bill should contain the name of each component, country of origin, quantity, purchase value, customs duty and total cost.
For services or works, the supplier should identify Indian and foreign elements such as domestic manpower, foreign experts, Indian subcontractors, imported software, overseas licences and foreign technical support. This information helps determine the actual value added in India.
Calculation of Local Content
After identifying domestic and imported elements, the bidder should calculate the local-content percentage using the method prescribed in the tender. Imported content should be deducted from the total value, and the result should be divided by the total value of the item.
The calculation should be accurate and supported by invoices, import documents, costing records and books of accounts. The supplier should avoid using estimated or unsupported figures.
Determination of Supplier Category
Once the local-content percentage has been calculated, the bidder can determine its supplier category. A percentage of 50% or more generally qualifies the supplier as a Class-I local supplier, while local content between 20% and 50% generally falls under Class-II.
A supplier with less than 20% local content will normally be treated as a non-local supplier. The applicable ministry notification should also be checked because a higher percentage may be prescribed for certain goods or services.
Preparation of Self-Declaration
Where self-certification is permitted, the bidder should prepare a declaration on its official letterhead. The declaration should mention the tender number, product or service name, local-content percentage, supplier category and location where domestic value addition takes place. It should be signed by an authorised person and should contain a confirmation that the information provided is true and supported by proper records.
Professional Verification
Where professional certification is required, the business should provide all relevant documents to the eligible auditor, chartered accountant or cost accountant. The professional may examine the bill of materials, purchase invoices, import documents, cost records, manufacturing information, foreign payments and tender requirements. After verification, the professional may issue a certificate confirming the local-content percentage and supplier category.
Submission with the Bid
The final certificate or self-declaration should be submitted with the bid in the manner prescribed in the tender. The bidder should ensure that the correct format has been used and all mandatory details have been included.
Uploading the certificate in the wrong section, omitting the local-content percentage or failing to mention the place of value addition may lead to rejection of the local-supplier claim or the bid itself.
Benefits of Make in India Certification
Eligibility for Government Tenders
A valid local-content certificate can help a business participate in government tenders that are restricted to Class-I local suppliers. Where sufficient domestic manufacturing capacity and competition are available, procuring authorities may allow only Class-I suppliers to submit bids. Therefore, proving the required local-content percentage can provide access to procurement opportunities that may not be available to Class-II or non-local suppliers.
Purchase Preference
Class-I local suppliers may receive purchase preference under eligible government tenders. Where the lowest bidder is not a Class-I supplier, an eligible Class-I supplier whose quoted price falls within the prescribed margin may be allowed to match the lowest price. This benefit gives domestic suppliers an opportunity to secure government orders even where they are not initially the lowest bidder, subject to the tender conditions.
Opportunity in Divisible Orders
Where the procurement quantity can be divided, a portion of the order may be awarded to an eligible Class-I local supplier after matching the lowest price. If the first eligible Class-I supplier does not accept the matching price or quantity, the opportunity may be offered to the next eligible Class-I supplier. This creates additional opportunities for domestic manufacturers to receive part of a government order.
Better Position on the GeM Portal
Local-content declarations can improve the ability of suppliers to participate in tenders and bids published on the Government e-Marketplace. Certain procurements on the GeM portal may be restricted to Class-I suppliers or may provide preference to products meeting the required domestic-content conditions. A properly prepared declaration can therefore improve the supplier’s visibility and eligibility in government procurement.
Access to Reserved Procurement Opportunities
Certain goods, services and works may be reserved for Class-I local suppliers where adequate domestic production capacity is available. In such cases, imported or low-local-content products may not be eligible to participate. A Make in India local-content certificate helps eligible domestic suppliers demonstrate their status and access such reserved opportunities.
Competitive Advantage Over Imported Products
A valid local-content declaration distinguishes genuinely manufactured or substantially value-added Indian products from imported products that have only been repackaged or rebranded in India. This can improve the supplier’s credibility before government buyers and show that the business contributes to Indian manufacturing, employment and economic development.
Development of Domestic Supply Chains
Businesses seeking higher local content may increase purchases from Indian manufacturers and develop domestic vendors. They may also replace imported components with Indian alternatives and engage local service providers. This helps strengthen domestic supply chains, improve the availability of spare parts and reduce dependence on overseas suppliers.
Support for Employment and Manufacturing
Higher domestic value addition creates demand for Indian raw materials, skilled workers, engineers, service providers, logistics businesses and testing laboratories. The Make in India procurement framework therefore supports employment generation, manufacturing capacity, local technology development and industrial growth.
Benefits for MSMEs and Startups
MSMEs and startups engaged in domestic manufacturing or services may use local-supplier status to improve their position in government procurement. Class-I status can provide access to restricted tenders and purchase-preference opportunities.
However, Udyam Registration or Startup India Recognition alone does not establish local-supplier status. The business must separately calculate and prove the required local-content percentage.
Improved Business Credibility
A properly prepared local-content certificate shows that the supplier maintains transparent costing, manufacturing and import records. It also demonstrates that the business can identify and verify the domestic and foreign elements of its products or services. This may improve the supplier’s credibility before government departments, public sector organisations and institutional buyers.
Purchase Preference for Class-I Local Suppliers
Divisible Procurement
In divisible procurement, the total quantity can be divided among more than one supplier. Where the lowest bidder is not a Class-I local supplier, the procuring authority may award part of the quantity to the lowest bidder.
An eligible Class-I local supplier whose price falls within the prescribed purchase-preference margin may then be invited to match the lowest price for the remaining quantity. The exact percentage of the order available to the Class-I supplier depends on the tender conditions.
Non-Divisible Procurement
In non-divisible procurement, the contract cannot be divided among multiple suppliers. Where the lowest bidder is not a Class-I supplier, an eligible Class-I local supplier falling within the purchase-preference margin may be asked to match the lowest price.
If the Class-I supplier agrees to match the price, the entire contract may be awarded to that supplier, subject to the procurement conditions. Class-II suppliers may participate where permitted but generally do not receive purchase preference.
Validity of the Make in India Certificate
A Make in India local-content certificate does not have a standard permanent validity period. It is normally connected with a particular tender, product, service, quantity, contract value and manufacturing process. A fresh or revised certificate may be required if the bill of materials changes, the imported-content value increases, the source of components changes or a different product is offered.
An updated certificate may also be needed where the tender prescribes a new format or the applicable local-content requirement is revised. Businesses should therefore avoid using the same certificate for every tender without checking whether the underlying product, costing and local-content details remain unchanged.
Penalties of Incorrect Local-Content Declaration
A bidder must exercise great care while calculating and declaring local content. If the supplier fails to achieve the percentage declared in the bid, its category may change from Class-I to Class-II or non-local. An incorrect declaration may lead to rejection of the bid, loss of purchase preference, recovery of benefits and financial penalties.
In serious cases involving false or misleading information, the supplier may also face cancellation of the contract or debarment from future government procurement. The business and its authorised signatory may also face action under the tender terms, procurement rules and other applicable laws. Therefore, every local-content claim should be supported by proper costing, manufacturing and import records.
Common Mistakes to Avoid
One of the most common mistakes is treating imported goods purchased from an Indian distributor as domestic content. The place of purchase does not determine the country of origin. The actual manufacturing origin and imported value of the goods must be considered. Businesses also make errors by including GST or other domestic indirect taxes in the calculation without checking the tender formula. Imported customs duties, foreign licence fees, overseas royalties and technical charges may also be incorrectly excluded.
Another common mistake is using the company’s overall turnover or general manufacturing data instead of preparing a product-specific or tender-specific calculation. The certificate should relate directly to the goods, services or works offered under the relevant tender. Submitting a self-certification where professional certification is mandatory, failing to mention the location of value addition and using an old certificate after changing suppliers or components may also lead to rejection.
Difference Between Make in India Certificate and Udyam Registration
Udyam Registration establishes that a business is registered as a micro, small or medium enterprise under the MSME context. It is based on the investment and turnover limits prescribed for MSMEs. A Make in India local-content certificate, on the other hand, confirms the percentage of domestic value addition in a specific product, service or work offered under a government tender.
A business may have a valid Udyam Registration but may still be treated as a non-local supplier if its product contains less than the required local content. Similarly, a large business that is not an MSME may qualify as a Class-I local supplier if its product meets the prescribed domestic-content requirement.
Difference Between Make in India Certificate and BIS Certification
BIS certification confirms that a product complies with an applicable Indian Standard relating to quality, safety or performance. Certain products require compulsory BIS certification before they can be manufactured, imported, distributed or sold in India.
A Make in India local-content certificate does not certify product quality or safety. It only confirms the extent of value addition carried out in India for public-procurement purposes. A product may therefore require both BIS certification and a Make in India local-content certificate. The local-content declaration does not replace BIS, WPC, TEC, FSSAI, CDSCO or any other product-specific regulatory approval.
Conclusion
The Make in India Certificate is not a general business registration issued by the Government. It is commonly understood as a self-declaration or professional certificate confirming the percentage of local content in specific goods, services or works offered under a government tender. To claim Class-I or Class-II local-supplier status, a business must correctly calculate domestic value addition, properly identify imported components and maintain adequate supporting records.
It must also follow the format and certification requirements mentioned in the relevant tender. Class-I local suppliers may receive significant benefits, including eligibility for restricted government tenders, purchase preference and opportunities to match the lowest bid. However, inaccurate or unsupported declarations can lead to rejection, penalties and debarment. Businesses should therefore prepare a separate and properly supported local-content calculation for every relevant product and tender.
Frequently Asked Questions
Q1. Does the Government issue a Make in India Certificate?
Ans. The Government does not generally issue a permanent certificate under this name. Depending on the tender conditions, the bidder submits either a self-declaration or a certificate issued by an eligible auditor, practising chartered accountant or practising cost accountant.
Q2. What is the minimum local content for Class-I status?
Ans. The general minimum local-content requirement for a Class-I local supplier is 50%. However, the concerned ministry or tender authority may prescribe a higher percentage for a particular product, service or sector.
Q3. What is the minimum local content for Class-II status?
Ans. A supplier generally qualifies as a Class-II local supplier where its local content is at least 20% but less than 50%. Such suppliers may participate in permitted tenders but ordinarily do not receive purchase preference.
Q4. Can a trader obtain a Make in India Certificate?
Ans. A trader may submit a local-content declaration only where the goods offered genuinely satisfy the prescribed domestic-content requirement. Merely purchasing imported goods from an Indian wholesaler or distributor does not convert them into locally manufactured products.
Q5. Is Udyam Registration mandatory for Make in India certification?
Ans. Udyam Registration is generally not mandatory for local-content certification unless specifically required by the tender. Both registrations serve different purposes, and Udyam status does not automatically prove domestic value addition.
Q6. Who can certify local content for a private limited company?
Ans. For high-value procurement, the local-content certificate for a private limited company may generally be issued by its statutory auditor or cost auditor, depending on the tender conditions and applicable procurement requirements.
Q7. Can a practising chartered accountant issue the certificate?
Ans. A practising chartered accountant may generally issue the certificate for entities other than companies, such as proprietorships, partnership firms and LLPs, subject to the applicable tender conditions.
Q8. Is the certificate applicable to services?
Ans. The local-content framework may apply to goods, services and works. In the case of services, domestic value addition may include Indian manpower, domestic infrastructure, Indian subcontracting and services performed within India.
Q9. Does Class-II status provide purchase preference?
Ans. Class-II suppliers may be eligible to participate in tenders where their participation is allowed. However, purchase preference is generally provided to Class-I local suppliers.
Q10. What happens if the declared local-content percentage is incorrect?
Ans. An incorrect declaration may result in rejection of the bid, loss of purchase preference, penalties, contract-related action or debarment. The consequences depend on the tender conditions and the seriousness of the incorrect claim.
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