Govt. restricts Chinese firms for public procurement

EDITOR: Publicrement refers to the purchase by governments and state-owned enterprises goods, services, and works. In a move that will mainly affect entities from China, The government has amended the General Financial Rules, 2017, Imposing restrictions on public procurement from bidders of countries that share a land border with India, citing grounds of defence and national security.

WHICH IS THE COMPETENT AUTHORITY?

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 Ministries of External and Home Affairs, respectively,will be mandatory. The government has extended lines of credit to Bangladesh, Nepal, Myanmar, exempting them from the new order.India has extended lines of credit totalling $30.59 billion to 64  countries, including 41 from Africa.The Finance

Ministry also said that,Relaxation will be provided for procurement of Covid medical supplies till December 31.

DOES IT ALSO APPLY TO PRIVATE COMPANIES?

While private sector has been exempted

from any such restriction, the order takes into its ambit-All 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

central government has also directed state governments to implement this order for all public procurement.

WHY THIS MOVE?

•Clash at border

•China not complying with De-escalation plan.

•Aatma nirbhar Bharat

PREVIOUS MOVE

In April, the government amended FDI rules mandating prior approval for investment by entities in countries that  share land borders with India.On June 23, the government made it mandatory for sellers on the Government e-Marketplace (GeM) portal to clarify the country of origin of goods when registering new products.