First Chinese App ban, now restrictions on public procurement from ‘land border with India’ countries



New Delhi : After banning 59 Chinese mobile applications, including top social media platforms such as TikTok, WeChat and Helo to ‘‘counter the threat posed by these applications to the country’s sovereignty and security”, Indian government has now imposed restrictions on public procurement from the countries which share a land border with India to strengthen the defence and national security.

The Department of Expenditure in a detailed Order has said that the government has amended the General Financial Rules 2017 to enable imposition of restrictions on bidders from countries which share a land border with India on grounds of defence of India, or matters directly or indirectly related thereto including national security.

As per the order, 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, Finance Minister Nirmala Sitharaman said.

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.

Since the state governments too play a vital role in national security and defence of the country, the Central government, invoking the provisions of Article 257(1) of the Constitution of India, has also written to State Chief Secretaries for the implementation of this Order in procurement by them and their undertakings. For State Government procurement, the Competent Authority will be constituted by the states but political and security clearance will remain necessary.

The Finance Minister said that the relaxation has been provided in certain limited cases, including for procurement of medical supplies for containment of COVID-19 global pandemic till 31 December this year. By a separate Order, countries to which the Indian government extends lines of credit or provides development assistance have been exempted from the requirement of prior registration.

The Ministry has 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. If this stage has been crossed, ordinarily the tenders will be cancelled and the process started de novo. The Order will also apply to other forms of public procurement. It does not apply to procurement by the private sector.