|  |  | 

India Top Headlines

After FDI, Chinese companies now face restrictions on obtaining government contracts | India News


NEW DELHI: In a major escalation of tension with China, the government changed Friday night to allow bidders from countries that share a land border with India to be stopped “for reasons of defense and national security.”
Although the order does not name any country, as in the case of the April 17 order that blocked FDI through the automatic route from the same set of neighbors, it is clearly aimed at examining and imposing restrictions on investments and associations. Chinese in Indian projects.
The new rules seek to block the supply of stationery, turbines and telecommunications equipment, as well as the award of road and electricity contracts to companies that have a link with China. The move follows a recent ban on 59 Chinese applications and comes in the context of the continuing military confrontation in Ladakh, where Chinese forces are dragging their feet to withdraw after partially honoring mutual agreements to withdraw. Indian military commanders and top diplomats have unequivocally conveyed to China that the status quo must be restored and India will do everything possible to safeguard its sovereignty.
The action announced on Friday night signals growing impatience with China over its inability to fully implement the “consensus” to disconnect and scale down. The order, which does not apply to private sector acquisitions, says: “The new provisions will apply to all new tenders.
With respect to already invited bids, if the first stage of rating evaluation has not been completed, bidders who are not registered in the new order will be treated as unqualified. ”
If the first stage has been crossed, normally the offers will be canceled and the process will start de novo. The government order modified the “2017 General Financial Rules” to allow the Center to intervene in matters directly or indirectly related to defense and national security.
According to the order, any bidder from those countries that shares a land border with India will be eligible to bid only if it is registered with an authority that will be established by the department of promotion of industry and internal trade. The acquisition will include goods, services (including consulting services and non-consulting services) or works (including turnkey projects) only if the bidder is registered with the “competent authority”.
Relaxation has been provided in certain limited cases, including the purchase of medical supplies for Covid-19 through December 31, 2020.

Reference page