Restrictions on public procurement from countries sharing land border

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Government of India has 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 announced this order.

Basic facts

General Financial Rules 2017: 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.

Only registered bidder: 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.

Registration committee: The competent authority for registration will be the registration committee constituted by the Department for Promotion of Industry and Internal Trade, DPIIT.

Political clearance: Political clearance from the External Affairs Ministry and security clearance from the Home Ministry will also be mandatory.

Institutions included: The order also takes into its ambit public sector banks and financial institutions, Autonomous Bodies, Central Public Sector Enterprises and Public Private Partnership projects receiving financial support from the government or its undertakings.

State governments: The Central government has also written to State Chief Secretaries for the implementation of this Order in procurement by them and their undertakings.

Relaxation for some products: The Finance Minister said the relaxation has been provided in certain limited cases, including for procurement of medical supplies for containment of COVID-19 global pandemic till December this year.

Apply to all new tenders: 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.

Does not apply to private sector: The Order will also apply to other forms of public procurement. The Ministry said it does not apply to procurement by the private sector.

(Source: AIR)