Public Procurement Projects in India Becomes Tough for Chinese Corporates

India has reportedly restricted countries which it shares land borders with, from bidding for public procurements projects without prior approval from competent authorities – this step is considered to be taken to control and restrict the Chinese companies.

The Centre has amended the General Financial Rules 2017 to enable the restrictions on grounds of national security, Mint reported.

Further, the order exempts countries which India provides development assistance or line of credit, thus effectively tying up only China and Pakistan. The relaxation for COVID-19-related medical supplies has been implemented till December 31, it added.

The move, so far, does not impact the private sector but includes all government and autonomous bodies, public sector banks and financial institutions, public-private-partnership (PPP) projects and central public sector enterprises (CPSEs).

As per the order, India will allow participation in procurement bids for goods, services or works from the countries in question only if the bidder is registered with a registration committee which will be instituted by the Department for Promotion of Industry and Internal Trade (DPIIT); besides political and security clearance from the Ministry of Home Affairs and the Ministry of External Affairs.

This will apply for all fresh tenders and for tenders already invited but where first stage evaluation of qualifications is not completed. If the first stage has been completed, tenders will have to be cancelled and re-done, the order states.

The Centre has written to state governments asking them to invoke provisions of Article 257(1) of the Constitution to restrict Chinese participation in state projects as well.

The new move comes after India banned 59 Chinese apps in the country, besides imposing 100 percent physical checks on all imports from the northern neighbour, and increasing scrutiny of Chinese investments in Indian firms by restricting foreign direct investment (FDI) from neighbouring countries without government approval.

All this came after both country’s troops clashed at the Line of Actual Control (LAC) in Ladakh in June, which killed 20 Indian soldiers.