Local procurement mandated for industrial boilers in govt tenders

New Delhi: India has decided to curb foreign participation in government contracts for industrial boilers, or steam generators, allowing only local firms to supply these.

This mandate for local purchase will cover certain variants of seamless steel pipes and tubes, carbon steel pipes, steel plates, refractory, insulation, and soot blower among others.

Among services, all survey, and site studies, Engineering, Procurement and Construction (EPC) contracts, fabrication, and civil construction will need to be sourced from domestic vendors.

"It has been assessed that sufficient local capacity and competition for these categories is present in the country," a senior official told ET, adding that appeals for case-to-case exemption can be made to a grievance committee.

All other services contracts pertaining to Industrial Boilers (steam generators) will also need to be locally sourced.

This directive is in line with Public Procurement (Preference to Make in India) Order 2017. The development gains significance as India works towards installing 80 Gigawatt (GW) of additional thermal power generation capacity where industrial boilers will play a key role.

Besides power generation, these boilers are widely used across manufacturing industries including textiles, chemicals, and food. Boilers also find application in oil and gas, steel, and cement sectors.

The domestic boiler market is expected to grow from ₹5,859 crore ($ 704.6 million) in FY19 to ₹8,831 crore ($ 1.1 billion) in FY30 according to the India Brand Equity Foundation (IBEF).

While demand for boilers across sectors is expected to rise, the biggest boost is expected from power generation where the Central Electricity Authority (CEA) projects investment of ₹6.67 lakh crore by 2031-32. India is also considering going beyond the already charted out 80 GW capacity addition to ensure grid stability.