NEW DELHI: Companies based in countries sharing a land border with India who bid for government procurement contracts are set to face tighter scrutiny.

They will have to provide details of the top 20 high-value outsourced components and goods, as well as sub-contracted works and services. The details include country of origin, major technical parameters, and specification of manufacturers and sub-contractors.

The rules are expected to tighten scrutiny of vendors from China and Pakistan, besides keeping a check on the quantum of imports.

The details would need to be certified by chartered accountants. “The idea is to improve local supply chain and manufacturing,” an official said.

The bidders will also have to furnish details of the contracts that they had received in the last five years from public procuring entities in India.

They will also have to give details of the status of those orders and attach a brief note explaining the reasons for seeking registration with the Registration Committee of the Department for Promotion of Industry and Internal Trade (DPIIT).

The Centre has fixed a 10% threshold to decide whether such a company has a “controlling stake” in case of government contracts.

Bidders can seek registration for multiple items in an application. They will have to do so by providing details for each item for which the registration is being sought.

“When the government takes a stance on blocking imports from a certain country, they have to check the origin of the components. Moreover, now auditors have to certify. So, one can expect an additional layer of checks there,” an expert on investment issues said.

The rules come after the government put in place a new foreign direct investment policy on April 18.

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