The Centre on Thursday imposed restrictions on public procurement from bidders belonging to countries sharing a border with India, over defence and national security concerns. The government’s decision came amid heightened tensions between India and China after the face-off between their troops in Ladakh last month.

According to the amended General Financial Rules, 2017, traders from such countries will be eligible to bid for any procurement in India only if they are registered with the Competent Authority. “The Competent Authority for registration will be the Registration Committee constituted by the Department for Promotion of Industry and Internal Trade,” the Centre said in an order. “Political and security clearance from the Ministries of External and Home Affairs respectively will be mandatory.”

The amended rules will apply to the procurement of both goods and services. The Centre has allowed exceptions in the procurement of medical supplies till December 31 because of the coronavirus crisis.

The new rules will cover public sector banks, autonomous bodies, Central Public Sector Enterprises and public-private partnership projects receiving financial support from the government or its undertakings, the government said.

The Centre’s decision to amend the financial rules came a day after reports emerged that China has not withdrawn its troops from all areas along the Line of Actual Control even after several rounds of talks with India to discuss disengagement and deescalation of border tensions. Earlier this month, India and China had decided to ensure “complete disengagement” of troops along the Line of Actual Control for “full restoration” of peace and tranquility in the border areas.

Tensions between India and China soared after a clash between their armies in Ladakh’s Galwan valley last month. Twenty Indian soldiers were killed and 76 injured in the violent altercation on the intervening night of June 15-June 16. The face-off between the two neighbouring countries was the worst instance of violence along the Line of Actual Control since 1975.

The violence sparked calls for the boycott of Chinese goods and businesses across the country. On June 29, India banned 59 Chinese apps, including TikTok, WeChat and Cam Scanner, alleging that they presented a security threat to the country. The Centre had said that the ban on the apps was “digital strike” on Beijing.

Earlier this month, Union Road and Transport minister Nitin Gadkari had said that China will not be allowed to participate in highway projects in India.