Introduction

This Factsheet outlines the current progress in advancing Sustainable Public Procurement (SusPP) in India based on a desk review. The review applies an analytical framework of six Pillars (or "building blocks") of SusPP systems.

The Framework is designed to make clear that countries do not need to follow a linear step-by-step path to build effective GPP systems. Rather it is important to examine local contexts and prioritize the Pillars with the most potential in the country. No matter where a country starts, a balanced approach to implementation calls for progress on all Pillars to some degree.

This Factsheet is organized as follows:

• "Country Overview" section with executive summary, indicative maturity rating, key achievements, potential pathways forward and timeline of key events related to advancing sustainable public procurement.
• "State of Play & Forward Looking Analysis" section that summarizes the research findings from the desk review for each Pillar theme.
• "Key Stakeholders Driving the Agenda" explores opportunities for ADB teams to open discussions with country counterparts and add value to the work of partners.

The Factsheet is intended to be a living document that will be revised and improved as new information is uncovered and advances are made. It is designed to support the ADB training programs on SusPP.

Public procurement constitutes nearly 30% of national GDP, representing an immense opportunity to drive a green and socially inclusive market transformation. India lacks a public procurement legislation and a central procuring unit - however SPP has gained traction across public entities, ministries and municipalities on an ad hoc basis. In the absence of legislation, the 2017 General Financial Rules and Manual established the basis for procurers to integrate environmental criteria into tender documents.

Authorities now have a wealth of experiences to draw from due to groundbreaking SPP initiatives led by the Indian Railways, GAIL India (petroleum and natural gas), Indian Oil and others. Efforts to simplify green purchasing have advanced, including the inclusion of green products and services in the Government e-Marketplace and ecolabelling schemes managed by the Confederation of Indian Industries (CII).

A Task Force on Sustainable Public Procurement was established in 2018 with a mandate to develop a national SPP policy and action plan. Such an effort could bring together a more coherent approach to SPP implementation in the country. However, for now, progress continues to be made.

Adoption of SusPP can be critical to meet the country's massive demand for infrastructure and construction to meet the needs of its large and rapidly growing population. Doing so can avert the looming crisis of overexploitation of its limited natural resources driving land degradation, biodiversity loss and serious air and water quality issues.

>> Snapshot of Sustainable Procurement Maturity Level

Maturity Level:

Intermediate Stage

Key Achievements

• General Financial Rules (GFRs) and Manual opened the door for SusPP in the absence of procurement law reform
  
• Indian Railways and other public agencies have implemented SusPP for over 10 years even without central procurement support
• Task Force on Sustainable Public Procurement created in 2018 and have prioritized seven priority spend categories to pilot SusPP implementation
• 2017 Public Procurement (Preference to Made in India) Order encourages inclusion of preferences in public procurements for domestic suppliers
• Government e-Marketplace includes sustainable products and services, making it simple for procuring entities to buy green and local
• Confederation of Indian Industries actively supports greening of industries and economic sectors, and manages certification programs
• Introductory training modules on SusPP available since 2020
  

Potential pathways forward

• Pilot the integration of sustainability criteria in ABD-financed procurements,
  
• Support public agencies to adopt SusPP (in the absence of a national approach)
  
• Support broad awareness raising on SusPP, including a seminar or national forum and communications campaigns
• Support procurement law reform to integrate SusPP concepts
• Partner with Ministry of Finance and other stakeholders to create more awareness and build capacity on SusPP concept
  

>> Timeline of Implementation of Sustainable Procurement Activities

2017

2021

1991

2008

2018

2012

2019

2006

2007

2022

2008

2014

2015

2013

Government

e-Marketplace adds features: forward auction for safe disposal of obsolete machinery, and buyback option for disposal of obsolete assets

Public Procurement Manual recognises environment sustainable criteria and total cost of ownership in evaluation .

Ministry of Environment & Forestry mandates development of GPP guidelines

Prime Minister's Council on Climate Change suggests Green Procurement & Purchasing Guidelines

Draft Procurement Bill proposes green criteria but not adopted

Expert Group for Planning Commission recommends purchasing preference for low-carbon goods & services

General Financial Rules & manuals revised to allow inclusion of environmental criteria in procurement

NITI Aayog calls for transition to Resource Efficiency & Circular Economy (in steel, aluminum, construction waste & electronics sectors)

Draft Resource Efficiency Policy

National ecolabel "EcoMark" launched

Task Force on Sustainable Public Procurement created by Department of Expenditure

Criteria developed for paper, cleaning products & air conditioning

National Environmental Policy: purchase preference for ISO 14000 goods & services

Multistakeholder consultations on green public procurement (GPP)

Green air conditioners added to Government online

e-Marketplace to simplify green purchasing

Indian Railways develops Sustainable Procurement Action Plan and Implementation Guide

Commitment to net zero emissions by 2070

National program for LED-based home and street lighting for promoting energy efficiency

Nationally Determined Contribution submitted

Guidelines on Corporate Social Responsibility & Sustainability for Central Public Sector Enterprises

Pillar 1: Government Vision & Awareness of SusPP

Governments that establish a clear policy vision on SusPP can accelerate the shift from procurement as an adminstrative to strategic function, making clear how SusPP can deliver on important national social and environmental goals.

The Government of India has ambitious policies that set out a vision of an inclusive and climate-resilient development pathway.

• Renewable Energy: India's 12th Five Year Plan promotes renewable energy adoption with a target of 30,000 MW renewables.
  
• Construction Waste: The Ministry of Housing and Urban Affairs adopted a Strategy for promoting processing of construction and demolition waste and utilization of recycled products in 2018.
• Resource Efficiency: A 2019 Draft Policy for Resource Efficiency encourages green public procurement including products manufactured from recycled scrap materials.
• Waste: The 2016 Plastic Waste Management Rules and E-Waste Management Rules in 2016 promotes Extended Producer Responsibility (EPR) to manage the growing waste problem.
• Labour Rights: India has ratified six out of the eight core International Labor Organization (ILO) Conventions.

The first clear policy linkage between public procurement and national environmental goals was made in 2006. The Ministry of Environment and Forests mandated the public sector to encourage applying a purchase preference for goods and services that met ISO 14000 standards on environmental management.

In 2017, the Government issued a Public Procurement (Preference to Made in India) Order as part of a broader "Made in India" policy. It mandates that every Central Public Sector Entity (CPSE) set a minimum annual goal of 20% of purchases from micro, small and medium sized enterprises (MSME). Recently the Policy has been updated to 25% minimum mandatory purchasing from MSMEs, including 3% from women-owned businesses.

In 2018, the Department of Expenditure in the Ministry of Finance constituted a Task Force on Sustainable Public Procurement (SPP) with the following Terms of Reference (ToR):

• Review international best practices in the area of SPP
  
• Inventorise the current status of SPP in India across Government organizations
  
• Prepare a draft Sustainable Procurement Action Plan
  
• Recommend an initial set of product / service categories (along with their specifications) where SPP can be implemented.
  

The Task Force issued a recommendation to focus SPP implementation on seven product categories to start. These categories include public works (brick, steel and cement), electrical appliances, information technology (computers & peripherals, photocopiers, telecommunications), pharmaceuticals, paper, office furniture and lighting.

In 2021, a Sustainable Procurement Action Plan and Implementation Guide was developed for Indian Railways under a EU-funded Switch Asia project. This Action Plan drew from 10+ years of experience of Indian Railways in conducting green and social public procurements.

In 2023, the Government of India was one of five countries to make a Global Pledge to procure green steel and cement, an initiative led by the Industrial Deep Decarbonization Initiative (IDDI).

Pillar 2: Legal & Regulatory Framework

Procurement law reform can be key to clear obstacles to implementation by establishing "value for money", not "lowest price", as a core procurement objective, and authorizing procurement approaches suited to SusPP.

Procurement practices are varied across the country due to the lack of a comprehensive public procurement law. A draft Public Procurement Bill with provisions on environmental criteria was introduced in the Parliament in 2012, but never adopted. A Manual for Public Procurement of Goods was updated in June 2022 to give recognition to adopt environmentally sustainable critieria and consider total cost of ownership as part of the procurement value for money assessment.

General Financial Rules (GFRs) guide procurement activities in India. In 2013, a requirement to purchase electrical appliances with star ratings from the Bureau of Energy Efficiency (BEE) was prescribed. In 2017, the GFR was updated to require that specifications shall comply with legal requirements on environment or pollution controls. Procurers are to give higher weight to quality as compared to price especially in the procurement of services (Rule 192). The Rules also encourages the inclusion of environmental criteria in bid documents (Rules 173(xi), 217, 218) and consideration of life cycle costs during award (Rule 136(iii)).

The Guidance Manual under the GFR promotes the preferential purchase of environmentally friendly goods throughout the procurement cycle. Specifically, it calls for the use of Environmental Management Systems (e.g. ISO 14001) as pre-bid criteria.

Pillar 3: Institutions & Capacity

The Procurement Policy Division (PPD) within the Department of Expenditure in the Ministry of Finance is responsible for guiding public procurement across the country. It works to harmonize public procurement processes, issues guidance and manuals, and builds capacity of procuring entities. However, it does not act as a central procurement authority with a mandate to centralize government purchasing. The National Task Force on Sustainable Public Procurement was created by the Department of Expenditure.

Adoption of SPP to date has been ad hoc, taken up by individual ministries and public sector entities rather than systematically across government. Leading public sector organizations on SPP include:

• Indian Railways (IR) has implemented SPP for over a decade starting with a commitment to reduce energy use by 15% in its Vision 2020. This led to initiatives to install LED lighting and source solar energy, as well as wastewater recycling, green toilets and biodegradable cutlery. IR has set a target to reduce greenhouse gas (GHG) emissions by 33% by 2030 by improving traction fuel and energy efficiency. It launched a Green Stations Initiative that rates and improves the environmental credentials of its railway stations.
  
• GAIL India, the country's petroleum and natural gas provider, has adopted several strategic SPP initiatives. It promotes green building principles in all new buildings projects, requires energy star ratings for compressors, turbines and generators and installs LED lighting.
  
• Indian Oil runs India's SATAT (Sustainable Alternative Towards Affordable Transportation) scheme aiming to produce automotive grade Compressed Biogas (CBG) from agricultural / sewage / organic waste generated in the country.
  

Pillar 4: Market Practices

Market engagement has not traditionally been an integrated step within the procurement cycle in India. However, the update to the GFR in 2017 includes a recommendation to use a two-stage bidding process where procurers lack knowledge of suitable market solutions. In the first stage, bidders are invited to propose a solution to the government need. Only bidders with approved solutions are invited to submit financial bids in the second stage. This process allows procurers to canvas the market and finetune specifications together with bidders.

The Confederation of Indian Industries (CII) is an active partner in advancing environmentally-friendly technologies across the private sector. The CII has developed several rating and labelling schemes to recognize green businesses:

• GreenCo Rating: Evaluates manufacturing and service companies on their environmental performance using a life-cycle approach. By 2019, 260 companies had been awarded a GreenCo Rating.
  
• GreenPro: A Type-1 Ecolabel for sustainable products, materials and technologies for the construction, operation and maintenance of buildings. Over 1500 products have obtained GreenPro certification.
  

Pillar 5: Procurement Operations

Although the GFR encourages the use of environmental criteria when awarding contracts, no guidelines exist on implementation so uptake remains ad hoc. Guidance manuals, specifications and bidding documents for SPP are needed, as well as capacity building for procuring entities.

The Government of India launched a national ecolabel "Eco-Mark" back in 1991, however it failed to gain widespread acceptance. More recently, several ecolabels have been launched in collaboration with the Confederation of Indian Industries (see next section).

The Government e-Marketplace (GeM) has emerged as a powerful tool to support public procurers to identify sustainable purchases. Procurers can find many environmentally friendly goods, such as:

• solar-powered renewable products such as inverters, streetlights, torch lights, study lamps, water heating systems, air conditioners, and battery-powered e-rickshaws for passengers
• products for pollution tracking, monitoring and rehabilitation, refuse disposal and treatment of hazardous and non-hazardous waste including sewage treatment
• Eco-Mark paper made from uncoated agro-based and recycled fibre-based raw material
  

The GeM's "Green Gold Collection" showcases bamboo accessories for potential use in the construction sector as well as bamboo handicrafts, disposable items and daily use products. The GeM also encourages procurers to avoid purchases altogether by procuring services instead of products, for example:

• Lease hiring of electric vehicles and buses [short and long-term] including operations and maintenance,
  
• Event and monthly-based hiring of air conditioners and desert coolers including supply, installation and maintenance for required number of days or contract period,
  
• Energy efficiency services namely, energy conservation and energy audit services and hiring of consultant for energy efficiency services/ projects,
  
• Maintenance contracts for solar, wind, hydro and biomass plants,
  
• Water audit and afforestation services
  
• Plantation and tree translocation services
  
• Housekeeping service with eco-friendly products for office premises, hospitals and guest houses
  

The e-Marketplace also features vendors that offer waste management and water conservation services.

Recent features include a "forward auction" that allows procurers to auction off fully-depreciated or obsolete assets with reuse value (e.g. electronics, machinery, scrap metal and vehicles) and a "buyback option" where vendors quote the price of new goods along with a price offered for the old goods they recover from procurers.

A new training programme on resource efficiency and circular economy was launched in November 2020 under an EU-funded project, which includes training modules on SusPP.

Pillar 6: Monitoring & Impact Measurement

Monitoring systems are essential to gather the information needed to keep SusPP implementation on course and communicate on the benefits achieved for the country.

Progress to date:

No information was found on monitoring of SusPP in India.

Areas to advance implementation:

• Establish clear targets to guide the implementation of SusPP (e.g. number of agencies involved, procurements completed, GHG emissions reduced)
  
• Integrate tracking of sustainability criteria in procurements within the update of the government's e-procurement system
• Develop tools to measure the positive environmental and social impact of SusPP, and publish these to build the business case for further adoption
  

Projects Supported by ADB

ADB conducted a 3 days training in Novermber 2023 for government ministries involved in ADB financed infrastructure projects in India, with focus on procurement planning, market engagement, sustinability requirements design and evaluation, application of criteria tools and LCC tools, contract management. In 2024, ADB will be undertaking a market readiness assessment for green specification/standard setting on selected commonly procured items in public procurement in India in collaboration with MOF Task Force on SPP.

Other Initiatives supported by National/International Agencies

UNEP (2018-2021) has supported the Government of India to advance SPP practices, including through:

• Addition of a "Green Room Air Conditioners" category to the Government e-Marketplace
  
• Study on "Shaping India's Inclusive and Green Economy" in the manufacturing sector
  
• Development of environmental criteria for three product categories: paper, cleaning suppliers and air conditioners
  

The EU-funded Switch Asia program (2018-2022) has supported the Government of India to advance SPP practices, including through:

• Development of Sustainable Public Procurement Action Plan for Indian Railways (2021)
  
• Training for Indian Railways procurement officers (2020)
  
• Support for MSMEs to adopt sustainable practices and access markets in various sectors: jute, bamboo, textile, leather, metal finishing, cleantech, e-waste, lead paints, organic foods.
  

References

ADB (2023). Asian Development Bank and India: Fact Sheet.

: Hasanbeigi, A., Bhadbhade, N. 2023. Green Public Procurement of

Steel in India, Japan, and South Korea. Global Efficiency Intelligence. Florida, United States.

Government of India, Press release on “New Initiatives by GeM to promote sustainable public procurement of products and services.”

UNEP (2021). Sustainable Public Procurement: Green Room Air Conditioners on Government e-Marketplace.

Government of Lao, 2022. Revised Public Procurement Manual

UNDP, 2017. Circular economy strategies for Lao PDR: A metabolic approach to redefine resource efficient and low-carbon development.

The World Bank. Global Public Procurement Database “Lao PDR country profile for 2021”.

The World Bank, 2020. Greener Growth through Good Wood: Sustaining Forest Landscapes and Local Livelihoods in Lao PDR.

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