Govt seeks inter-ministerial clarity on Chinese bidders' registration

DPIIT asks ministries to submit inputs within 30 days of application

To address the high number of pending applications, a standing committee reviewing the implementation of public-procurement orders, chaired by the secretary to the Department for Promotion of Industry and Internal Trade (DPIIT), has asked nodal ministries to submit their recommendations on registration of bidders from countries sharing land borders with India within 30 days of receiving the application.

 

This was the view after it emerged that India had granted registration to only 17 entities of the 269 applications, with 148 applications rejected while 104 applications are waiting for comments from nodal ministries or the National Security Council Secretariat, Ministry of Home Affairs, and Ministry of External Affairs.

 

The number of applications received was 775 but 506 of those were incomplete and a deficiency letter was issued to applicants.

 

“Standing Committee may direct all the concerned Ministries/ Departments to give their explicit recommendations regarding the grant of registration or otherwise within 30 days for further processing of the application. Standing Committee may also direct the concerned Ministries/ Departments to expedite their recommendations/ comments on the pending applications,” the minutes of the latest meeting of the standing committee, reviewed by Business Standard, showed. 

 

In February 2023 the Department of Expenditure had mandated that any bidder from a country that shared land borders with India would be eligible to bid in any procurement, whether of goods, services, or works including turnkey projects, only if the bidder was registered with the committee concerned at the DPIIT. This applies also to Indian bidders who have a Specified Transfer of Technology (ToT) arrangement with an entity from a country that shares land borders with India.

 

The above amendment to the public-procurement order aligns with Press Note 3 of 2020, which mandated government clearance for investment from land-bordering countries, particularly China, following the Galwan Valley clashes of security forces of the two neighbours, also in 2020.   Pending applications include 16 with the Ministry of Health and Family Welfare, 14 with the Ministry of Petroleum and Natural Gas, 11 with the Ministry of Steel, and eight with the Department of Financial Services.

 

Ajay Dua, former industry secretary, said this was more of a request than direction by the standing committee. “The 30-day limit should also be applicable to the Ministries of Home and External Affairs because security clearance takes a lot of time. As Chinese entities supply goods, services and work at a competitive price, it also helps the government cut costs,” he added.  

 

In India, public procurement accounts for 20-22 per cent of gross domestic product (GDP). Government e-Marketplace (GeM), through which the government now procures a substantial part of its procurement, has closed FY24 with Rs 4 trillion in gross merchandise value (GMV), doubling its GMV clocked at the end of the previous financial year.