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India excludes BD from trade curb imposed on neighbours

Mir Mostafizur Rahaman | July 25, 2020 00:00:00

India has excluded Bangladesh from the trade restrictions imposed lately on the countries sharing land border with it.

As per an order, any bidder from countries sharing land border with India will need registration and permission from several agencies to bid in any procurement whether of goods, services or works (including turnkey projects).

Political and security clearance from the Ministries of External and Home Affairs respectively will be mandatory for the bidders, said the order issued recently by the Indian authorities.

The restrictions, mainly targeted at Chinese businessmen, were imposed through an amendment to the General Financial Rules, following the recent border skirmishes between India and China.

But in a separate order issued last week, countries like Bangladesh, to which India extends lines of credit or provides development assistance, have been exempted from the requirement of prior registration, a spokesperson at the Indian High Commission in Dhaka told the FE.

Relaxation has also been provided in certain cases like procurement of medical supplies for containment of the Covid-19 pandemic until December 31, 2020. The Department of Expenditure of India issued a detailed order on public procurement, outlining the restrictions.

The order takes into its ambit public sector banks and financial institutions, autonomous bodies, Central Public Sector Enterprises (CPSEs) and Public Private Partnership projects receiving financial support from the government or its undertakings.

"The new provisions will apply to all new tenders. In respect of tenders already invited, if the first stage of evaluation of qualifications has not been completed, bidders who are not registered under the new order will be treated as not qualified. If this stage has been crossed, ordinarily the tenders will be cancelled and the process started de novo. The order will also apply to other forms of public procurement," the spokesperson said.

Commenting on the decision to exclude Bangladesh from the restriction, renowned economist Dr Ahsan H Mansur told the FE that India should not make the mistake to include Bangladesh in the restriction considering the closeness of the two countries.

"It's good that they have excluded us but they should be more cautious while framing such policy," he added. "Such moves are a calculated response to shape Chinese calculus on the border issue which is getting serious by the day in the absence of any commitment by the Chinese to resolve it amicably," Harsh Pant, a leading foreign relations expert, told the NDTV commenting on the decision.

India imported goods worth over US$70 billion from China in 2019 while the bilateral trade deficit stood at about $50 billion, much higher than any other trading partner.

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