New Delhi, Sept 27 (PTI) Hundreds of companies that were either owned by Chinese nationals or with substantial Chinese beneficiary interest have been removed from the government's procurement portal GeM in the last three years, a senior official said on Wednesday.
Meanwhile, Chief Executive Officer of GeM (Government e-Marketplace) Prashant Kumar Singh on Wednesday said by and large there is no product on the platform from companies, whose owners are from countries that share land border with India.
"We have weeded out a lot of fake sellers, particularly after the order of the department of expenditure regarding land border sharing countries, wherein certain country products are not to be used on GeM," Singh told reporters here.
"This has to be a very rigorous exercise. So, we look into the shareholding pattern… to see if there is a land border sharing country and then remove/disqualify them.
"It's a huge amount that we have removed. Categories that were severely impacted include laptop, desktops, medical devices, where people had a Chinese footprint," he said.
According to the senior official quoted earlier, hundreds of companies were owned by Chinese nationals or having substantial Chinese beneficiary interest were removed from GeM in the last three years.
After the border stand-off with China, the Department of Expenditure had made changes in General Financial Rules in July 2020 that forbade bidders from countries sharing land borders with India from participating in any government procurement of goods, services and works unless they register with a competent authority.
Competent authority in this case was the registration committee constituted by the Department for Promotion of Industry and Internal Trade (DPIIT).
Before granting registration, political and security clearance is required from the Ministry of External Affairs and Ministry of Home Affairs.
The GeM was required to obtain certification from vendors that they are compliant with the order, and remove sellers who do not submit it within a cut-off date.
Apart from direct shareholding, the GeM also scrutinised the vendors to determine if any stake was held indirectly and amounted to substantial beneficial ownership, Singh said.
The procurement restrictions had followed similar curbs on investments in Indian companies in 2020.
These orders in no way violate any of India's commitments at the World Trade Organization (WTO) as investment and government procurement are still not part of any of the agreements at the global trade regulating body.
Many developed countries have been pushing for inclusion of public procurement in WTO but have faced pushback from many developing countries such as India.
Singh also said the new technology partner Tata Consultancy Services (TCS) will be taking over the GeM portal from October 3 as the term of contract of existing technology vendor Intellect Design Arena nears an end.
The existing contract runs till December but in the intervening period the incumbent will handhold TCS for a smooth handover.
After taking full control, TCS would build an entirely new platform for GeM while keeping the old one running in the intervening period, he said.
He added that the switchover to the new vendor would lead to savings in excess of Rs 1,000 crore a year through 45-50 per cent reduction in variable payout.
The GeM portal was launched on August 9, 2016, for online purchases of goods and services by all central government ministries and departments.
GeM has over 63,000 government buyer organisations and over 62 lakh sellers and service providers offering a wide range of products and services.
Currently, government departments, ministries, public sector units, state governments, and central armed police forces are allowed to carry out transactions through this portal.
The portal provides a wide range of products from office stationery to vehicles, and from automobiles and computers to office furniture.
Services, including transportation, logistics, waste management, webcasting and analytical, are listed on the portal.