What two-year exemption for Chinese power firms means for domestic manufacturers
The Department of Expenditure under the Union Ministry of Finance has granted a two-year exemption from public procurement restrictions to four Indian subsidiaries of Chinese electrical equipment manufacturers, allowing them to participate in Central government procurement without registration under the Public Procurement Order.
The exemption, effective June 24, 2026, has been granted following a request from the Ministry of Power and recommendations of the Registration Committee, with the approval of the Competent Authority.
Four companies exempted
The exemption applies to TBEA Energy India Pvt. Ltd., Nanjing Electric India Pvt. Ltd., New Northeast Electric India Pvt. Ltd., and Taikai Electric (India) Pvt. Ltd.
All four companies have manufacturing facilities in India and manufacture specialised power equipment, including EHV power transformers, gas-insulated switchgear (GIS) and glass insulators.
The exemption allows these companies to participate in tenders floated by Central government agencies for two years without obtaining registration under the Public Procurement Order.
The move is expected to benefit Central sector utilities such as Power Grid Corporation of India Limited (PGCIL), enabling them to procure critical power equipment from these companies if they participate in tenders.
Background
The exemption relates to Public Procurement Order No. 4 dated February 23, 2023, issued under Rule 144(xi) of the General Financial Rules (GFRs), 2017.
The order requires bidders from countries sharing a land border with India to register with the Competent Authority, namely the Registration Committee constituted by the Department for Promotion of Industry and Internal Trade (DPIIT), before participating in government procurement.
The Public Procurement Order classifies sensitive sectors into two categories. Category I includes sectors such as space, defence and atomic energy, while Category II covers sectors including power and energy, banking, civil aviation and agriculture.
For Category II sectors, including power, bidders having transfer of technology (ToT) arrangements involving sensitive technologies with entities from land-border countries are required to obtain registration.
Government rationale and market impact
According to the Office Memorandum issued by Under Secretary Praveen Kujur, the exemption was approved after deliberations by the Committee of Secretaries based on recommendations of the Registration Committee. The Ministry of Power had sought the exemption for companies with manufacturing facilities in India that supply equipment for critical power sector projects.
The memorandum also states that the exemption “may not be considered as a precedence.”
The decision has drawn attention in the domestic power equipment sector, where companies have benefited from strong order inflows, transmission expansion, grid capital expenditure and renewable energy integration in recent years.
Market participants believe the exemption could increase competition in public sector tenders, particularly for specialised transmission equipment, potentially leading to pricing pressure and affecting margins for domestic manufacturers.
The featured photograph is for representation only.
