Amid the border tension with China, the government has changed trade rules imposing restrictions on public procurement from China and other countries with the common border. According to the changed rules, the government has imposed restrictions on firms, companies from countries which share common land border after it amended the General Financial Rules 2017. An official statement on Modi government latest move said that this has been done on the grounds of defence of India, or matters directly or indirectly related thereto including national security. The Department of Expenditure has, under the said Rules, issued a detailed order on public procurement to strengthen the defence of India and national security, it said. Here what the order says:
- As per the order, it said, any bidder from such countries sharing a land border with India will be eligible to bid in any procurement whether of goods, services (including consultancy services and non-consultancy services) or works (including turnkey projects) only if the bidder is registered with the Competent Authority.
- The Competent Authority for registration will be the Registration Committee constituted by the Department for Promotion of Industry and Internal Trade (DPIIT).
- Political and security clearance from the Ministries of External and Home Affairs respectively will be mandatory.
- The order takes into its ambit public sector banks and financial institutions, autonomous bodies, Central Public Sector Enterprises (CPSEs) and public private partnership projects receiving financial support from the government or its undertakings, it added.
- The Government has also written to the Chief Secretaries of the State Governments invoking the provisions of Article 257(1) of the Constitution of India for the implementation of this Order in procurement by State Governments and state undertakings etc.
- For state government procurement, the Centre said, the Competent Authority will be constituted by the states, but political and security clearance will remain necessary.
- Relaxation has been provided in certain limited cases, including for procurement of medical supplies for containment of COVID-19 global pandemic till December 31, 2020.
- By a separate order, countries to which the Government of India extends lines of credit or provides development assistance have been exempted from the requirement of prior registration, it said.
- The new provisions will apply to all new tenders. In respect of tenders already invited, if the first stage of evaluation of qualifications has not been completed, bidders who are not registered under the new Order will be treated as not qualified," it said.
- If this stage has been crossed, ordinarily the tenders will be cancelled and the process started de novo, it said, adding that the order will also apply to other forms of public procurement. It does not apply to procurement by the private sector.
As India changes trade game, does it mean trouble for China's Huawei
After the government of India changed rules for firms, companies from countries sharing same land border in awarding public contacts citing national security, the move could bring hardship for China's Huawei to participate in 5G network role out.
(With inputs from PTI)
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