New Delhi–In a bid to promote manufacturing in India, the cabinet on Wednesday approved the domestic purchase preference policy for state-run oil firms that will allow domestic service or product providers to offer a higher bid and still be eligible for the contract.

“Manufacturers/service providers whose quoted price is within 10 per cent of the lowest valid price bid, would be eligible for purchase preference for a stipulated portion of the purchase order, on matching such price,” a Petroleum Ministry statement said here.

The preference policy will be applicable for five years.

“A steering committee will oversee implementation, carry out annual review and recommend continuation of the policy from year to year basis,” it said.

“Targets of local content (LC) will be stipulated for certain oil and gas business activities,” it added.

The cabinet also approved setting up of an Indian Institute of Petroleum and Energy at Visakhapatnam with a capital expenditure of Rs 655.46 crore. (IANS)