The government will demand foreign firms use more locally produced materials when working on government-run projects, a government order said late on Friday.
Authorities have been aggressively promoting Prime Minister Narendra Modi's flagship campaign of a self-reliant economy by urging domestic manufacturers to cut down on imports.
The trade ministry's Department for Promotion of Industry and Internal Trade (DPIIT) ordered all government administrative divisions to notify it of projects valued above Rs 1,000 crore ($135.96 million) that are planned for the next five years.
DPIIT has still to announce the new local content requirement threshold for foreign firms entering into partnerships for state-run infrastructure projects. The threshold is currently 20-50 per cent.
Firms in countries which do not allow Indian companies to participate in their government projects will not be allowed to tender bids for Indian government projects, the order said.