Government adds to its China squeeze, puts procurement behind firewall

This means Chinese companies cannot participate in the power project or a rail project or the telecom bidding without getting security clearance.
Representational images of China and India's flags (Photo | AFP)
Representational images of China and India's flags (Photo | AFP)

NEW DELHI: Months after putting the squeeze on Chinese investment in India and banning 59 apps, the Centre on Thursday raised a bigger firewall, this time creating checks and balances for procurement. A new layer of political clearance has also been added to the approval process. Vetting will be done both at the Central and State levels. 

According to a finance ministry release issued late on Thursday night, bidders from countries sharing a land border with India can participate only if they are registered with a ‘competent authority’, a move aimed at restricting Chinese companies from bidding for government procurement or taking part in power, rail or telecom projects.

“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 release said. Curiously, political and security clearance from the ministries of External and Home Affairs, respectively, will be mandatory for companies to be eligible to bid.

This means Chinese companies cannot participate in the power project or a rail project or the telecom bidding without getting security clearance. The competent authority will be the Registration Committee constituted by the Department for Promotion of Industry and Internal Trade. The new order, however, will not apply to countries to which India has extended lines of credit or in which India is engaged in development projects. 

Earlier, there were reports that Chinese firms may be allowed to bid for coal mines. The latest decision seems to restrict any such participation. The Centre has also written to state governments to implement the new guidelines in their respective states. “For State Government procurement, the Competent Authority will be constituted by the states but political and security clearance will remain necessary,” the release said. 

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