Union government on Thursday amended the General Financial Rules, 2017 to enable imposition of restrictions on bidders from countries which share a land border with India. The restrictions on public procurement from such countries can be imposed for reasons of national security and other factors directly or indirectly related to the country’s defence.
A statement released by the Union Finance Ministry said the Department of Expenditure had, under the said rules, issued a detailed order on public procurement to strengthen the defence of India and national security.
Also read | Government nod mandatory for FDI from neighbouring countries
Mandatory registration
“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 statement said.
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 External and Home Ministries, respectively, will be mandatory.
Banks too in list
The order takes within 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.
“The State Governments too play a vital role in national security and defence of India. The Government of India has 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,” the order said.
For State government procurement, 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 till December 31.
Exemption given
“By a separate Order, countries to which Government of India extends lines of credit or provides development assistance have been exempted from the requirement of prior registration. The new provisions will apply to all new tenders,” the statement said.
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 will be started de novo.
The order will also apply to other forms of public procurement. It does not apply to procurement by the private sector.
