Indian Brands Face Hurdles in State Electronics Tenders

Between 2021 and 2023, the Uttar Pradesh government acquired nearly 70 lakh tablets and smartphones, totaling over Rs 7,500 crore, primarily for social welfare initiatives. These purchases were facilitated through the Government e-Marketplace (GeM) portal. However, a significant portion of these orders was awarded to international brands like Samsung and Acer, through select third-party channel partners, leaving Indian brands such as Micromax and Karbonn at a disadvantage.

Challenges and Criticisms

Indian companies argue that certain tender requirements, such as prior government supply experience and high turnover thresholds, make it difficult for them to qualify. Vikas Jain, co-founder of Micromax, expressed frustration over unchanged criteria despite appeals to various government bodies. Similarly, Karbonn Mobiles' managing director, Pardeep Jain, believes that including more domestic brands in these tenders would enhance competition and reduce costs, benefiting welfare programs.

Government Contracts and Domestic Manufacturing

Ajai Chowdhry, co-founder of HCL and chairman of the National Quantum Mission's governing board, suggests that government contracts could be divided into smaller lots to encourage the participation of Indian companies. He highlights the success of China's model in supporting local manufacturing. Despite attempts to contact Samsung and Acer for comments on their reliance on third-party channel partners or bid price similarities, there has been no response.

Procurement Data Insights

A review of procurement data reveals that bids from Samsung and Acer channel partners often fall within narrow price ranges. For instance, in UPDESCO's 2022 smartphone tender, Acer's partner Vision Distribution initially emerged as the lowest bidder, with Samsung's partners following closely. After a reverse auction, the final awarded price was slightly reduced. Similar patterns were observed in the 2023 tablet tender, where Acer's and Samsung's partners were awarded orders after a reverse auction.

UPDESCO and GeM have not commented on these decisions, despite repeated inquiries. The standard disclaimer on GeM states that any specific terms and conditions are introduced by the buying government agency, which is solely responsible for the impact on the bidding process. Experts and local manufacturers advocate for fairer, more inclusive tender structures by states to foster domestic manufacturing and ensure better value for government-funded programs.