The government has allowed domestic companies to partner with Chinese companies through technology transfer agreements to bid on public projects. This development is a major degradation of the government’s stance towards Chinese companies, as it has barred them in any way possible from doing business in the country following the escalation of border tensions between the two countries. Last year.
In July 2020, following border tensions, the government amended its General Financial Rules (RGF), stipulating that bidders from any country sharing a land border with India must first register with a ” competent authority “to be eligible. public markets. However, he had made an exception for bidders from countries where India had extended a line of credit or was engaged in development projects. In this way, countries like Nepal, Bhutan and Bangladesh were automatically exempted and it was clear that the order was for companies owned by China, as those based in Pakistan do not participate in government procurement.
However, an office memorandum released by the procurement policy division of the finance ministry’s expenditure department earlier this month said: countries sharing a land border with India. Therefore, these tenderers are not required to be registered with the competent authority ”.
Official sources said the easing was necessary as many Indian companies bidding on government and public sector projects have entered into technology-sharing agreements with Chinese companies, especially in infrastructure sectors. Accordingly, the relevant administrative ministries had requested clarification from the Ministry of Finance as to whether these bidders should be allowed to participate in the tenders or disqualified.
Sources said that since the technology transfer is done on payment of fees by Indian companies to their Chinese counterparts and the executing companies are Indian, such concessions can be made.
Industry sources said the easing now gives Chinese companies some leeway to do business in India. Since the start of last year, the government has also taken a strict approach towards Chinese companies by banning all Chinese apps and banning telecom equipment makers like Huawei and ZTE from building networks for BSNL owned by the state or even for private sector telecommunications operators.
In fact, the government had taken such a tough stance that last year it even withheld import shipments, which mostly included industrial components, from China at ports apprehensive of malware. It was only after the domestic industry urged the government to clear their shipments because it was hurting their production that the customs authorities began to clear the shipments.