In a bid to promote the ‘Make in India’ drive, the Union Government has announced increasing the target of domestic procurement by public sector companies working in the oil and gas sector.

The decision was taken at a meeting of the Cabinet Committee of Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi, which on Thursday approved incentivising domestic production by providing purchase preference to oil and gas service providers who meet local procurement targets.

The new policy would be applicable for five years and a steering committee would be constituted to oversee its implementation and carry out annual review, said Petroleum Secretary K D Tripathi.

He said the government intends to have different slabs under local content requirement for different goods and services in the upstream and downstream segments. And the targets would be increased subsequently to keep the momentum going. He added that the targets would progressively increase to keep the momentum going.

“The service provider who meets local content targets and whose quoted price is within 10 per cent of lowest price bid, would be eligible for 10 per cent purchase preference for a stipulated portion of the purchase order, on matching the lowest price,” Mr Tripathi said.

The policy will apply to all public sector enterprises and their wholly owned subsidiaries, joint ventures that have 51 per cent or more equity by one or more public sector enterprises, the Petroleum Ministry said.