Law Updates

Subject

Summary: On 13th July 2026, the Ministry of Power issued an important order revising the Public Procurement (Preference to Make in India) Order for the power sector, specifically related to Energy Meters, including Smart Meters. This order fixes a new Minimum Local Content (MLC) requirement with a clear deadline, directly impacting manufacturers, suppliers, and public procurement agencies in India's power and smart metering industry. This guide explains the order in simple terms and what businesses need to do to prepare. The Regulatory Framework India's Public Procurement (Preference to Make in India) policy is designed to promote domestic manufacturing by giving purchase preference to local suppliers, especially for government and public sector procurement. In the power sector, this is implemented through periodic orders issued by the Ministry of Power, which fix the Minimum Local Content (MLC), the minimum percentage of a product that must be manufactured within India for specific items listed in an official annexure. This latest order is a revision of an earlier order, and it has a layered history: Order Date What It Did Original MLC Order 20.02.2024 Set a trajectory to achieve 70% MLC in energy meters (including smart meters), effective from 1st June 2025 First Revision 08.07.2025 Put the 70% MLC trajectory on hold (in abeyance) for 1 year or until further orders, due to industry representations about manufacturing challenges. Current Order 13.07.2026 Introduces a new, specific MLC requirement for energy meters and smart meters, effective from 01.06.2028 What Has Changed? The most important thing to understand is that this order does not simply restore the earlier 70% MLC target. Instead, it introduces a new, more specific set of local content requirements for a future date. Here is exactly what has been added to the existing Minimum Local Content annexure (Serial No. 43 of Annexure-I) for Energy Meters, including Smart Meters: Item Detail Effective Date Minimum Local Content Requirement Energy Meters, including Smart Meters 01.06.2028 Mechanical relays must be 100% made in India     Chipsets must be designed in India In simple words, from 1st June 2028, any energy meter or smart meter sold through public procurement in India must have its mechanical relays fully manufactured within the country, and its chipsets must be designed by Indian teams or Indian-based design processes, not just assembled or imported and relabelled. The order also clearly states that all the other provisions of the earlier order remain unchanged, meaning this is a targeted, specific addition rather than a complete overhaul of the existing local content policy. Implementation Timeline/Norms Unlike many compliance orders that take effect immediately, this one gives the industry a long runway to prepare. Date Event 20.02.2024 Original order set 70% MLC target effective 1st June 2025 08.07.2025 70% MLC trajectory kept in abeyance for 1 year or until further orders 13.07.2026 New order issued adding specific mechanical relay and chipset design requirements 01.06.2028 New Minimum Local Content requirement becomes effective This means that businesses have roughly two years from the date of this order to prepare their supply chains, manufacturing processes, and chipset design capabilities before the requirement becomes mandatory on 1st June 2028. Why This Was Implemented? The government's approach here reflects lessons learned from the earlier, stricter 70% MLC target that had to be paused: Industry feedback led to a more practical approach. The original 70% blanket MLC target faced pushback because manufacturers found it difficult to achieve across all components at once. This new order instead targets specific, critical components (mechanical relays and chipsets) rather than an overall percentage, making it more achievable and measurable. Supporting the Revamped Distribution Sector Scheme (RDSS), Smart meter installation is a key part of India's RDSS program to modernize the power distribution network. The government wants to keep this rollout moving while gradually building domestic manufacturing capacity, rather than stalling installations over unmet local content targets. Building strategic manufacturing capability: The essential, expensive parts of any smart meter are chipsets and mechanical relays. The government is advocating for greater technological independence, not merely assembly-level "Make in India," by mandating that chipsets be designed in India. Long lead time for capacity building- Since chipset design and relay manufacturing require significant investment in R&D, testing, and production capability, the government has given industry until 2028, nearly two years, to build this capacity properly. By lowering reliance on imported parts for vital grid infrastructure, this order assists India's larger self-reliance mission in vital infrastructure areas like power and electronics, which is in line with the Atmanirbhar Bharat aims.  Impact on Businesses The revised localization requirements will have a significant impact on manufacturers, suppliers, and public procurement agencies involved in India's smart metering ecosystem. Early planning and supply chain adjustments will be essential to ensure compliance before the 2028 deadline. Smart meter manufacturers must localize two critical components:  Companies making energy meters and smart meters for government and public sector procurement must ensure mechanical relays are 100% India-made and chipsets are designed in India by the 2028 deadline. Chipset design capability becomes a competitive necessity:  Companies that don't currently have in-house or India-based chipset design capability will need to build or acquire this capability, which is a significant technical and financial undertaking. Relay component suppliers get a guaranteed domestic market: Indian makers of mechanical relays stand to gain directly from the guarantee of a domestic market for relay component providers. After June 2028, imported relays will no longer be eligible for public procurement.  Import-dependent manufacturers face the biggest adjustment:  Companies currently relying on imported chipsets or relays for their smart meters will need to transition their supply chains well before the deadline to remain eligible for government tenders. Public procurement agencies must update tender conditions:  Government departments, CPSEs, DISCOMs, and other public bodies procuring energy meters will need to incorporate this MLC requirement into their tender specifications starting well ahead of 2028. How Businesses Will Achieve Compliance Step 1: Assess Current Component Sourcing Manufacturers should map out where their mechanical relays and chipsets currently come from, whether imported, assembled locally from imported parts, or already designed in India, to identify the compliance gap. Step 2: Invest in Chipset Design Capability Since chipsets must be designed in India, not just manufactured or assembled here, companies need to invest in local R&D teams, form design partnerships with Indian semiconductor design firms, or collaboration with Indian research institutions. Step 3: Build or Partner with Domestic Relay Manufacturers For the 100% India-made mechanical relay requirement, companies should identify reliable domestic relay manufacturers or consider setting up in-house relay production lines. Step 4: Plan a Phased Transition Before 2028 Given the two-year runway, businesses should create a phased transition plan starting with pilot batches using India-designed chipsets and India-made relays, scaling up production capacity well before the 2028 deadline. Step 5: Engage with Industry Associations and the Ministry Companies facing genuine technical or capacity challenges should engage proactively with the Ministry of Power and relevant industry bodies, as the earlier abeyance of the 70% MLC order shows the government is open to consultation and practical adjustments. Step 6: Update Vendor and Tender Documentation Public sector buyers and their private sector vendors should begin updating internal procurement checklists and vendor qualification criteria to include this MLC requirement well ahead of the 2028 rollout. Compliance Checklist Table Action Item Responsible Team Priority Map current relay and chipset sourcing Procurement/Supply Chain High Build India-based chipset design capability R&D/Technology Team High Identify/develop domestic relay suppliers Procurement/Manufacturing High Create phased 2026–2028 transition roadmap Management High Update tender/vendor documentation Procurement/Legal Medium Engage with the Ministry on implementation challenges Government Affairs/Industry Bodies Medium Benefits for Businesses While the notification introduces new localization requirements, it also provides businesses with a strategic opportunity to strengthen domestic capabilities, improve supply chain resilience, and remain competitive in future government procurement. Clear, long-term visibility for planning:  A fixed 2028 deadline lets businesses plan investments and capacity building well in advance, rather than reacting to sudden compliance requirements. Guaranteed market access for compliant manufacturers: Companies that build the required capabilities early secure continued eligibility for large-scale government and RDSS-linked procurement. Boost to India's electronics and chip design ecosystem:  Businesses investing in chipset design capability now position themselves at the forefront of India's growing semiconductor design industry. Reduced import dependency risk: Companies that localize relay and chipset sourcing become less vulnerable to global supply chain disruptions and currency fluctuations. Stronger positioning in India's smart grid growth story: As RDSS and smart metering expand nationwide, early-compliant manufacturers can capture a larger share of this growing market. Right Decision or Additional Burden? The case for "right decision": This order reflects a mature, learned approach to local content policy. Rather than repeating the earlier blanket 70% MLC target that had to be paused due to industry pushback, the government has now identified two specific, high-value components and given the industry a realistic two-year timeline to comply. This is a more targeted, achievable, and strategically meaningful requirement than a broad percentage-based mandate. The case for "additional burden": Building India-based chipset design capability is not a trivial task it requires significant investment in talent, R&D infrastructure, and time. Smaller manufacturers without existing design capabilities may find it challenging to meet this requirement independently and may need to rely on partnerships or consolidation. The balanced view: This order is a well-calibrated and reasonable regulatory decision. It learns from the earlier abeyance, narrows the scope to critical, strategically important components, and provides a genuinely workable timeline. Businesses that view this as an opportunity to build deeper technological capability, rather than just a compliance hurdle, are likely to benefit significantly in the long run. Business Opportunities Created The phased localization requirements create new growth opportunities for Indian manufacturers, technology providers, and service firms that support the smart metering ecosystem. Domestic chipset design firms and semiconductor design startups stand to gain significant new business from smart meter manufacturers needing India-designed chipsets. Mechanical relay manufacturers in India have a guaranteed, growing market as public procurement shifts entirely to domestic relay sourcing by 2028. Contract design and R&D service providers can offer chipset design-as-a-service to smart meter companies that don't want to build in-house design teams. Testing and certification labs will see increased demand to verify compliance with the new local content requirements before 2028. Consulting and compliance advisory firms can help manufacturers plan their transition roadmap and navigate procurement documentation changes. Component supply chain integrators connecting smart meter manufacturers with certified domestic relay and chipset suppliers can build a valuable intermediary business. Corpseed's Core Message This Ministry of Power order shows a smarter, more targeted approach to India's Make in India policy in the power sector, moving away from a broad percentage target toward specific, strategically important components like chipsets and mechanical relays. With a clear 2028 deadline, energy meter and smart meter manufacturers have real time to prepare, but that time should be used wisely, not wasted. At Corpseed, our message to manufacturers, component suppliers, and public procurement stakeholders in the power sector is straightforward: start building your India-based chipset design and domestic relay sourcing capabilities now. Two years may sound like a long runway, but building genuine design and manufacturing capability takes real time. Businesses that begin this transition early will not only stay compliant but will also position themselves as preferred, future-ready suppliers in India's rapidly expanding smart metering and RDSS ecosystem.