Rising border tensions along the Line of Actual Control (LAC) has lead to increased scrutiny of Chinese investments in India.
Even after restrictions on acquiring public assets in India, Chinese companies may be able to participate in infrastructure projects.
The new norms might exempt infrastructure projects funded by multilateral agencies such as the Asian Development Bank (ADB), World Bank and Asian Infrastructure Investment Bank, according to a Mint report.
Many of these organisations fund large infrastructure projects in India, the report said.
On July 23, the Ministry of Finance imposed restrictions on bidders from countries that share a land border with India. The order prohibits such companies from public procurement in India without prior approval.
"In projects which receive international funding with the approval of the department of economic affairs (DEA), the ministry of finance, the procurement of guidelines applicable to the project shall normally be followed, notwithstanding anything contained in this order and without reference to the competent authority. Exceptions to this shall be decided in consultation with DEA," the Department of Expenditure (DoE) said in a notification.
The government's move came amid rising border tensions along the Line of Actual Control (LAC), that have led to increased scrutiny of Chinese investments in India.
"If Chinese companies are not allowed to participate in the competitive bidding process funded by multilateral lending agencies, it would violate the principle of equal treatment to all their member countries," an official told the publication.