Explore the recent amendments in the DPIIT Approval process for entities from land border sharing countries in India. Understand the changes in documentation, security clearance, and exemptions. For support in the DPIIT Approval process, contact Abhinarayan Mishra at KPAM & Associates.
Here, we are exploring the recent amendment in DPIIT Approval process for entities from land border sharing countries. The Government of India amended its General Financial Rules, 2017 and brought certain additional compliances for such entities for participation in public procurement process in India, in July 2020 through Department of Expenditure Order No. F.No. 6/18/2019-PPD dated 23-07-2020. Subsequently, there were several amendments. The whole process was re-casted on 23-02-2023 through Order (Public Procurement No. 4). Accordingly, DPIIT revised the formats for registration of bidders from countries sharing land border with India in April, 2023.
Following are the summary of changes in DPIIT Application process:
- Covering letter: It must reflect the list of all required documents. The authorised signatory needs to be authorised for this specific purpose.
- In Appendix A, row numbers 4 and 8, a new concept of TOT is brought into. A bidder having TOT arrangement is being asked to give details.
TOT means Transfer of Technology. It means dissemination and transfer of all forms of commercially usable knowledge such as transfer of know-how, skills………etc which enables the acquirer of such technology to perform activities, using the transferred technology independently.
- Appendix – B is applicable to manufacturer, other than bidder. There is no changes in this.
- Appendix C: Changes of TOT are:
1. Copy of Agreement with TOT entity with bidder to be attached. This is going to prove difficult for companies, selling products manufactured by others
2. Financial details of TOT entity including net worth certificate from CA
3. Beneficial ownership details of TOT Entity to be certified by CA
- Appendix- D is seeking the details of items for which registration is being sought. Under row-7, details of 20 top high value outsourced components are required to be furnished.
- Appendix-E: The whole Appendix F is introduced for security clearance of the directors, management, and beneficial ownership (10%) of the bidder.
- Appendix-F: The details of board and management of the manufacturer and entity providing TOT for security clearance are being asked.
- Appendix-G: Bidders with TOT arrangement for sensitive sectors and sensitive technology must give details in which sectors the bidder is seeking registration.
- Beneficial ownership is defined as 25% controlling ownership interests.
- This is different as compared to 10% beneficial ownership for TOT entities
- On submission of application, the Competent Authority will first seek political and security clearance from Ministry of External Affairs and Ministry of Home Affairs.
- In case of state government, the respective competent authority is authorised to evaluate/grant application, after the political and security clearance from the Government of India.
- Procurement of essential spare parts from Original Equipment Manufacturers will be exempt from the DPIIT registration.
So, the new amendment has brought the concept of TOT entity, sensitive sectors and sensitive technology among other changes. This will make the registration process more rigorous.
In case you have any concern and queries or need any support in DPIIT Approval process, you may like to contact us.
Abhinarayan Mishra, FCA, FCS, LL.B, IP, RV; Managing Partner, KPAM & Associates, Chartered Accountants, Dwarka, New Delhi; +9910744992, ca.abhimishra@gmail.com
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