Central Govt Lifts Curbs To Allow CPSEs To Import RE Material From China

NTPC and other such Central Public Sector Enterprises have finally got a level playing field with private sector companies and can now import from China the materials needed in renewable projects. In a major announcement, the Central government has lifted the curbs imposed on them in 2020 to stop procurement of items from countries involved in a land border dispute with India. The green signal was given at a recent meeting that was chaired by the Cabinet Secretary.

Even as private sector companies enjoyed the exemptions, the CPSEs continued to face competition because the components of a renewable project were cheaper in China than those in other countries. Left exempted from the restrictions, the private companies could cut the cost of their renewable projects leaving behind the CPSEs like NTPC.

The exemption will now enable NTPC and other CPSEs engaged in RE projects to cut costs by directly importing from bidders/companies from China without the mandatory requirement of registration in India.

Following the exemption extended by the Cabinet Secretary, the Ministry of New and Renewable Energy is expected to follow suit and formally submit a proposal to the Finance Ministry to introduce and notify the exemption clause.

Although the curb on CPSE imports was introduced in the wake of violent clashes with the PLA troops of China at Galwan in July 2020, yet the official reason was attributed to Mission Atmanirbhar Bharat. Tweaked to change the public procurement in India, Rule 144 (xi) to General Financial Rules directed that any bidder from a country — for any goods/services including consultancy and non-consultancy services and turnkey projects — that shares a land border with India, will have to be registered with a competent authority.

However, since CPSEs have largely had to import the renewable components through engineering, procurement, and construction contractors, this inevitably raised the overall project cost and hit CPSEs considerably at a time the government is girding up the loins to achieve the 2030 target.

The inter-ministerial discussions held in April reflected a spot of bother and many more amendments are in the order to simplify the tighter procurement procedures like the registration process under GFR Rule 144, registration of sub-contractors, transfer of technology, exemptions, classification of suppliers/bidder, registration for procuring raw material etc.