New Delhi: The Centre on Thursday night changed its public finance rules to make it harder for companies from bordering countries like China and Pakistan to bid on government tenders and projects.
Companies from nations that share a land border with India will now have to register with a committee set up by the Department for Promotion and Industry and Internal Trade (DPIIT) before they can become eligible to bid for a government tender.
In addition to this, political and security clearance from the external affairs ministry and home affairs ministry will also be mandatory, an official press release said, without elaborating on how this procedure would look.
“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,” a finance ministry press release 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,” it added.
The Centre has also asked state governments to follow suit, saying that for procurement at the state-level, the competent authority will be constituted by the respective local governments, but broader political and security clearance from the MEA and MHA will still be necessary.
The expenditure department, which comes under the finance ministry, issued two separate orders on late Thursday night.
The first order lists out the details of the restrictions – the new provisions will apply to all new tenders, but 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,” it said.
The second order provides exemptions to bordering nations to whom India currently offers lines of credit or to countries with which the Indian government has a joint development project.
This, according to the MEA’s website, will include countries like Bangladesh and Nepal, which means that companies and individuals from those countries will not be required to register or seek clearance from the MHA.
The Centre’s notification, however, does not mention the names of any particular country or group of countries and merely says that an updated list of countries with which India has a joint development project or has extended a line of credit to can be accessed on the MEA’s website.