Desi companies seek access to states' electronics tenders

NEW DELHI: Between 2021 and 2023, the Uttar Pradesh govt purchased nearly 70 lakh tablets and smartphones worth over Rs 7,500 crore, largely for social welfare programmes. These large-scale orders were processed through the Govt e-Marketplace (GeM) portal.
Documents reviewed by TOI show that a significant portion of these orders went to Korean and Taiwanese brands Samsung and Acer, which participated through select third-party channel partners.
Indian brands such as Micromax and Karbonn, previously significant players in the domestic smartphone market, say certain tender requirements - such as prior govt supply experience and high turnover thresholds - make it difficult for them to qualify.

"We have written to various govt bodies, but the criteria remain unchanged," says Vikas Jain, co-founder of Micromax. The company has been part of the central govt's Production-Linked Incentive (PLI) scheme. Karbonn Mobiles managing director Pardeep Jain believes including more domestic brands in these tenders would increase competition and lower costs, ultimately benefiting welfare programmes.
Ajai Chowdhry, co-founder of HCL and chairman of the National Quantum Mission's governing board, emphasises that govt contracts could be split into smaller lots to encourage the participation of Indian companies. He draws a parallel with China's model, where local manufacturing is actively supported.
Despite multiple attempts, Samsung and Acer did not respond to queries about their reliance on third-party channel partners or similarities in their bid prices. While, as global giants in electronics, they can't be faulted for participating and winning the bids, it's unclear why they don't bit directly.
A review of procurement data indicates that bids from Samsung and Acer channel partners often fall within narrow price ranges.
In UPDESCO's (Uttar Pradesh Development Systems Corporation) 2022 smartphone tender for 25 lakh devices valued at Rs 2,500 crore, Acer's partner Vision Distribution initially emerged as the lowest bidder at Rs 10,198 per unit, while Samsung's partners Celkon Impex and NF Infratech quoted Rs 10,224 and Rs 10,253 respectively. After a reverse auction, the final awarded price stood at Rs 9,972 per unit.
Similarly, in the 2023 tablet tender for 15 lakh devices valued at Rs 1,900 crore, Acer's partners Celekt and Armee Infotech initially quoted Rs 12,591 and Rs 12,662 respectively, while Samsung's three partners submitted bids ranging from Rs 12,627 to Rs 12,675. After a reverse auction, all five channel partners were eventually awarded orders at Rs 12,456 per tablet.
UPDESCO has not commented on these decisions, despite repeated follow-ups over last four weeks. GeM also did not respond to a questionnaire sent by TOI. However, its standard disclaimer states that any specific terms and conditions - which may narrow competition - are introduced by the buying govt agency and only that agency is responsible for the impact on the bidding process.
Of course, UP isn't the only state to procure electronic devices. Local manufacturers and industry experts believe that fairer, more inclusive tender structures by states will foster domestic manufacturing and ensure better value for govt-funded programmes.