New Delhi: The Ministry of Finance has announced relief measures for contractors and suppliers working on government projects, granting deadline extensions and waiving penalties for delays caused by the ongoing Middle East conflict.
According to an official memorandum issued by the Department of Expenditure, such disruptions will be treated under the “Force Majeure” clause. This provision applies to extraordinary situations beyond human control, including war, allowing temporary relief from contractual obligations when work is impacted.
The decision covers a wide range of public procurement contracts, including goods, services, and infrastructure works. Suppliers, consultants, and contractors engaged with government agencies will be eligible for this relief if their operations have been directly affected by the situation.
Under the guidelines, project deadlines due on or after February 28, 2026, may be extended by a minimum of two months and up to four months. Importantly, these extensions will not attract any additional cost or penalty, provided the delays are clearly linked to the disruptions.
Officials clarified that the application of the Force Majeure clause will be assessed on a case-by-case basis. Authorities will examine the validity of claims before granting extensions, ensuring that only genuine cases receive relief.
The ministry also specified that the benefit will apply only to those who were not already in default before the crisis. Contracts where obligations were already unmet prior to February 27, 2026, will not qualify under this provision.
While the clause offers temporary protection, it does not eliminate all contractual responsibilities. Only those delays directly attributable to the disruptions will be covered, and all obligations are expected to resume once normal conditions return.
The move is aimed at supporting businesses navigating global uncertainties while maintaining accountability within public projects, ensuring continuity once the external situation stabilises.
