In a move aimed at China, the finance ministry had in July last year said that bids for government tenders coming from countries sharing a land border with India would have to be cleared by a government-constituted panel.
The department of expenditure had amended the General Financial Rules, 2017, in the interest of national security at a time when geo-political tensions were escalating with India’s largest neighbour.
“Department of Expenditure may, by order in writing, impose restrictions, including prior registration and/or screening, on procurement from bidders from a country or countries, or a class of countries, on grounds of defence of India, or matters directly or indirectly related thereto including national security,” the July order said.
However, due to the Covid-19 pandemic and considering that most key components in the manufacture of medicines come from China, the government had exempted the procurement of medical supplies directly related to the containment of the pandemic from the provisions of the order till December 31, 2020.
As per the amended rules the department for promotion of industry and internal trade would set up a committee to vet all applications from such countries and only those bidders with a compliance certificate would be able to participate in public tenders.
At the time, experts had expressed concerns regarding the impact on projects and manufacturing in sectors that are heavily dependent on the import of Chinese materials such as renewable energy, electronics, highways and railways.