‘National Security’: Chinese Traders Kept Out of Public Bids

In light of COVID-19, supply of medical supplies have been exempted from the recent restrictions. 

2 min read
A packaging film manufacturing factory

India has added another restriction in its economic activities with China reportedly on the grounds of “national security” and “defence of India,” by limiting bidders from countries with which it shares land borders with.

While India shares land borders with China, Pakistan, Afghanistan, Bangladesh, Myanmar, and Nepal, it exempted countries to which it extends lines of credit, thus making it applicable to only two countries – Pakistan and China, Livemint reported.

Bidders will be restricted from the procurement processes if they are not registered with the competent authority – the registration committee to be constituted by the Department for Promotion of Industry and Internal Trade (DPIIT).

Recently, the Government of India's Ministry of Electronic and Information Technology banned 59 Chinese apps including WeChat, TikTok, Mi Community and UC browser, saying that they are prejudicial to India's sovereignty, integrity and national security.

"The Government of India today 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,” the finance ministry reportedly said in a statement.

The private sector has reportedly been exempted from these restrictions, while including public sector banks and financial institutions, autonomous bodies, Central Public Sector Enterprises (CPSEs) and Public Private Partnership projects, that get government aid.

Political and security clearance from the Ministries of External and Home Affairs respectively will reportedly also be mandatory and the amendment 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 statement added.

Relaxation has reportedly been provided in certain limited cases, including for procurement of medical supplies for containment of the COVID-19 global pandemic till end of December 2020.

The latest round of restrictions comes in light of recent India-China tensions, where nearly 40,000 Chinese troops are reportedly still in eastern Ladakh.

(With inputs from Livemint)

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