Exemption on procurement restrictions imposed on medical supplies from China will now be extended till October 31.
The Finance Ministry has modified order dated July 23, 2020 and issued an office memorandum stating that exemption, which was available as a special case till December 31, 2020, has now been extended till October 31, 2021. Though no explanation has been given for the decision, given that China is one of the largest suppliers of active pharmaceutical ingredient to India and the rising need given the current situation, extension has been granted so that there is be problem in supply of medicines and other medical products.
Amid rising border tensions with China last year, the Centre had issued an order related to public procurement. This amended the General Financial Rules 2017 to enable imposition of restrictions on bidders from countries that share a land border with India on grounds of defence of India, or matters directly or indirectly related thereto including national security. According to the order, 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 order also said 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.
As a special case, relaxation was provided for procurement of medical supplies for Covid-19 containment till December 31, 2020.
Commenting on the latest development, Pavan Choudary, Chairman, Medical Technology Association of India (MTaI), said: “China is deeply embedded in the global supply chain. To suddenly weed it out could lead to high costs, low quality and, most dangerously, short supply of essential medical devices & equipment which are the mainstay in handling the Covid crisis. Therefore, despite our poor diplomatic relationship with China at this moment, it is a prudent measure to extend the exemption given to medical supplies from China from procurement restrictions. Trade and adversarial foreign relations should move on different tracks.”
Choudary added that “as NITI Aayog has just recently stated that domestic companies should not seek protectionism as it would build inefficiencies and hurt quality and exports. Therefore, domestic manufacturers should look to optimally utilise the Chinese/imported component supply to assemble the products and simultaneously benchmark and indigenise these for domestic manufacturing.”