The Department of Expenditure under the Ministry of Finance has reiterated and consolidated provisions related to the Force Majeure Clause (FMC) across government procurement manuals, reaffirming how extraordinary disruptions will be treated in public contracts.In an office memorandum, issued by the Procurement Policy Division, the government has referenced existing provisions in the Manual for Procurement of Goods (2024), Consultancy Services (2025), Non-Consultancy Services (2025), and Works (2025), restating the scope and applicability of Force Majeure conditions.
The memorandum defines Force Majeure as extraordinary events beyond human control, including natural calamities, war, riots, strikes, or other unforeseeable disruptions. It clarifies that such events may temporarily suspend contractual obligations when they prevent either party from fulfilling their commitments.
However, the clause does not exempt parties permanently from obligations. Instead, it only suspends performance for the duration of the Force Majeure event. Suppliers are required to notify the contracting authority within a reasonable time, generally within 14 days of occurrence, and retrospective claims are not permitted.The memorandum also specifies that if Force Majeure conditions continue beyond 90 days, either party may opt to terminate the contract without financial penalties on either side.Importantly, it reiterates that suppliers will not be penalised for delays or breaches if such delays arise directly due to Force Majeure events, even where contracts otherwise include punitive provisions for delays.The document further highlights that such provisions apply both ways, including situations where the purchasing organisation itself is affected by Force Majeure conditions, requiring communication with suppliers for appropriate action.Commenting on the development, Smit Shah, President, Drone Federation India, said, “Over the past few months, the industry has been dealing with component shortages, logistics delays, and tighter export controls, all of which are beyond the control of domestic manufacturers but directly affecting delivery timelines. This move provides much-needed relief and predictability, while reinforcing confidence in India’s push towards building a resilient and self-reliant drone ecosystem.”
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