Public procurement regarding telecommunications and power has been particularly subjected to allegations of corruption over the past few years, and several government employees, and public figures have been indicted or convicted, as reported by the US Commercial Service 2013. Foreign companies should take note that the Indian government permits a price preference for local suppliers over foreign suppliers in government contracts. In addition, in October 2011 the government announced the National Manufacturing Policy, which encourages government procurement practices that would discriminate against foreign companies, according to the US Commercial Service 2013.
According to Global Integrity 2011, there are cases in which companies that violated procurement regulations have managed to circumvent the law through connections, and thereby continued to participate in biddings. There are also cases where companies that have a clear record of bribery have succeeded in returning to the procurement system after having been barred from bidding. Furthermore, according to the KPMG India Fraud Survey 2012, procurement is ranked by the surveyed corporate respondents as the most vulnerable sector for fraud.
A March 2012 report prepared by the World Bank and cited in a May 2012 article by the Financial Express reveals corruption in three national highway projects funded by the World Bank in India. According to the report, two private contractors influenced officials and consultants of the National Highways Authority of India (NHAI) with bribes and gifts (including gold coins) in exchange for obtaining contracts.
Companies are recommended to use a specialised public procurement due diligence tool to mitigate corruption risks related to public procurement in India. See more on public procurement under 'Public Anti-Corruption Initiatives'.