Industry Odisha Bureau, Oct 13: Railway zones and production units must remove restrictive, brand-specific conditions from procurement tenders. A vigilance probe found such terms created monopolistic situations. Buyers must choose BIS-marked products where available.
The Railway Board has ordered the removal of restrictive conditions from procurement tenders. The directive applies to railway zones and production units across the network. Its aim is to curb brand-specific buying that can shut out rival suppliers.
The instructions follow a vigilance investigation into railway purchasing practices. It found that certain tender conditions were creating monopolistic situations. When specifications point to one brand, few suppliers can qualify to bid. That can weaken competition and limit the buyer’s choices.
Tender documents must now avoid naming specific brands, trade names or trademarks wherever feasible. BIS, the Bureau of Indian Standards, certifies products against national quality standards. Where BIS-marked products are available, purchases must be restricted to them. A standard defines required quality; a brand names a particular seller. A senior official said no tender should favour a brand where BIS norms apply. The rules echo existing government procurement guidelines, which the board seeks to reinforce.
Existing item descriptions and specifications will also be reviewed. Brand-linked requirements will give way to generic, non-restrictive wording. Describing items by function and standard can widen eligibility without diluting quality.
Procurement has drawn scrutiny before. In 2022, lapses in buying winter jackets were flagged to the railways. Concerns were also raised over retro-reflective tapes used in raincoats.
The stakes are high because railway purchasing is vast. Indian Railways bought goods worth ₹75,793 crore in 2023-24, its latest annual report shows. That excludes track items and supplies bundled into works contracts. Railway zones and production units handled nearly 73% of those purchases. This decentralised model gives local units wide buying authority. Consistent tender rules help keep practices uniform across them.
The network’s 306 depots stock more than 242,000 types of items. These range from raw materials and components to spares and consumables. Writing clear, brand-neutral specifications for so many products is complex work.
The directive also lands during a period of heavy railway investment. Railways plan to spend ₹2.81 lakh crore from gross budgetary support in 2026-27. Gross budgetary support is funding provided directly from the Union budget. Another ₹12,000 crore will come from extra-budgetary resources. Total planned capital expenditure thus reaches ₹2.93 lakh crore. This is investment spending, distinct from the goods procurement figures.
Open tenders could draw more bidders, including smaller and newer manufacturers. Established suppliers may face stiffer competition for contracts. Lower prices, however, are not guaranteed by brand-neutral wording alone.
Much will depend on how consistently zones and production units apply the rules. The review of existing specifications will be the first practical test. Its results could shape competition across one of India’s largest public buyers.
