The Department of Telecommunications (DoT) has issued a notification that allows it to bar foreign telecom equipment suppliers from participating in tenders floated by state-run companies and central and state governments.
According to a letter dated February 19, 2020, addressed to all central and state government departments and public sector units (PSU), the provision of clause 10(d) of Public Procurement (Preference to Make in India) Order 2017 can be invoked in relation to certain telecom items against any foreign government that does not allow Indian suppliers to participate and/or compete in procurement of telecom equipment.
The eight items listed in the letter include optical fibre, 2G/3G/4G/LTE modems, routers, Wi-Fi based broadband wireless access system and GPON equipment.
While the notification does not mention China, but the implications for Chinese companies are clear as their government does not encourage Indian suppliers in sectors such as telecom and power. The move is set to hit China-based companies such as Huawei, ZTE and UTStarcom that may not be allowed to participate in government projects.
As per the letter, the Department for Promotion of Industry and Internal Trade has identified DoT as the nodal department for implementing the provisions related to procurement of goods, services or works related to the telecommunication sector. Further, the provision of clause 10(d) should find clear and specific mention in any telecom equipment procurement tender floated by any government/PSU procurement agency.
