Under the revised guidance, contracts with completion deadlines on or after February 28, 2026, that have been affected directly or indirectly by the West Asia disruptions may be granted an extension of at least two months and up to four months, without any penalty or additional cost to contractors.
New Delhi:The government has moved to ease pressure on contractors affected by the rapidly evolving West Asia crisis by allowing them to invoke Force Majeure, formally recognising the situation as a “war-like” event under public procurement rules.
In an office memorandum, the Ministry of Finance said the prevailing conditions qualify as a valid trigger for Force Majeure, enabling contractors to seek relief from delays caused by supply chain disruptions, logistics challenges, and input shortages linked to the crisis.
Under the revised guidelines, government contracts with completion deadlines on or after February 28, 2026, may be granted extensions ranging from two to four months without penalties or additional costs. The memorandum clarified that punitive provisions for delays or breach of contract will not apply if the delay is directly attributable to events covered under the Force Majeure clause.
Authorities have emphasised that such claims will be evaluated on a case-by-case basis, with procuring entities required to reset delivery or completion timelines instead of imposing liquidated damages or denial clauses.
However, the relief is conditional. Contractors will be eligible to invoke Force Majeure only if they were not already in default as of February 27, 2026, and the delays must be clearly linked to disruptions arising from the West Asia situation.
The government also noted that if Force Majeure conditions continue beyond 90 days, either party may terminate the contract without financial repercussions. Contractual obligations, however, will resume once normal conditions are restored.
The clarification builds on provisions outlined in key procurement manuals, which define Force Majeure as extraordinary events beyond human control—such as war—that disrupt the execution of contractual obligations.