Context: Recently, the Government of India amended the General Financial Rules (GFR) 2017 to enable the imposition of restrictions on bidders from countries which share a land border with India on grounds of defence of India or matters directly or indirectly related thereto including national security.
Key Points

• The Department of Expenditure has issued this Order.
• As per this Order, any bidder from countries that share a land border with India can bid in the procurement of goods/services only if the bidder is registered with the Competent Authority.

Who is the Competent Authority?

• The Registration Committee constituted by the Department for Promotion of Industry and Internal Trade (DPIIT).

Also required:

• Political clearance from Ministry of External Affairs.
• Security clearance from Ministry of Home Affairs.
• 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 GOI has also written to the Chief Secretaries of the state governments to implement this Order in procurement by State Governments and state undertakings, etc.
• For State Government procurement, the Competent Authority will be constituted by the states but political and security clearance will remain necessary.
• Relaxation has been provided in certain limited cases, including for the procurement of medical supplies for containment of the COVID-19 pandemic till 31st December 2020.
• By a separate Order, countries to which the Government of India extends lines of credit or provides development assistance have been exempted from the requirement of prior registration.
• The Order does not apply to procurement by the private sector.

About General Financial Rules

• GFRs are a set of rules that deals with matters concerning public finances.
• They are issued by the Department of Expenditure under the Finance Ministry.
• These rules are to be followed by all departments/ministries and organisations under the government and other specified bodies while dealing with matters involving public finances.
• They were first issued in 1947, and later were modified in 1963, 2005 and the latest in 2017.