India imposes restrictions on public procurements from neigbouring countries, eye on China

With an aim to keep Chinese vendors out from public procurements, Modi government on Thursday anunced restrictions on bidders from countries 'which share a land border with India' on grounds of defence and national security. 

government has amended General Financial Rules 2017 and has issued an order requiring registration of bidders from such countries in order to be eligible to bid in public procurement of goods, services (including consultancy services and n-consultancy services) or works (including turnkey projects).

Registration Committee constituted by Department for Promotion of Industry and Internal Trade (DPIIT) will be authority to clear such bidders. Political and security clearance from Ministries of External and Home Affairs respectively will be mandatory.

In a statement, Ministry of Finance said order takes into its ambit public sector banks and financial institutions, Automous Bodies, Central Public Sector Enterprises (CPSEs)and Public-Private Partnership projects receiving financial support from Government or its undertakings.

Centre has written to Chief Secretaries of State Governments invoking provisions of Article 257(1) of Constitution of India for implementation of this Order in procurement by State Governments and state undertakings etc. For State Government procurement, a Competent Authority will be constituted by states but political and security clearance will remain necessary.

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Relaxation has been provided in certain limited cases, including for procurement of medical supplies for containment of COVID-19 global pandemic till 31 December 2020.

By a separate Order, countries to which India extends lines of credit or provides development assistance have been exempted from requirement of prior registration. To be clear, India provides 'development assistance' worth crores of rupees to most of its neighbours — Afghanistan, Nepal, Bhutan, Bangladesh, Sri Lanka and Maldives. only two countries where se new restrictions truly apply is China and Pakistan — both a security concern for New Delhi.

new provisions will apply to all new tenders. In respect of tenders already invited, if first st of evaluation of qualifications has t been completed, bidders who are t registered under new Order will be treated as t qualified. If this st has been crossed, ordinarily tenders will be cancelled and process started de vo. Order will also apply to or forms of public procurement. It does t apply to procurement by private sector.

Tensions with China

Tensions with China escalated as People's Liberation Army (PLA) and Indian Army were involved in a violent standoff at Galwan Valley in Ladakh. 20 Indian soldiers were martyred in stand-off which triggered an anti-China sentiment across country with traders and businesses appealing to boycott neighbouring country. Following escalation, Indian government also 59 Chinese mobile apps citing security and privacy concerns. 

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