India plans to let US, other foreign firms bid for government contracts: Report
India is preparing to open a significant portion of its government procurement market to foreign companies, including US firms, in what officials describe as a strategic policy shift tied to ongoing trade negotiations.Two senior government officials told news agency Reuters that contracts worth over $50 billion, primarily issued by federal agencies, could soon be accessible to US companies as part of a broader effort to strike a limited trade agreement with Washington by early July.advertisementThe move follows a similar concession made to the United Kingdom earlier this month under the India-UK Free Trade Agreement. British firms were granted access to select central government tenders on a reciprocal basis, signaling a shift in India's traditionally protectionist stance on public procurement.
'In a policy shift, India has agreed to open its public procurement contracts gradually to trading partners including the U.S. in a phased manner and reciprocal manner,' said one official familiar with the negotiations.While the total value of India's public procurement market is estimated at $700–750 billion annually, including spending by central, state and local governments, only federal-level contracts are expected to be opened up initially. State and municipal tenders will remain off limits for now, sources told the news agency.The development comes as trade minister Piyush Goyal concluded a visit to Washington aimed at accelerating bilateral talks. Both sides are hoping to finalise an interim deal before the 90-day tariff pause announced by President Donald Trump expires in July.advertisementThe US had threatened a 26% tariff on certain Indian imports if a deal isn't reached in time.India has long resisted joining the WTO's Government Procurement Agreement, citing the need to shield domestic small businesses. However, officials stress that the new approach won't compromise that principle.A quarter of government contracts will remain reserved for Indian small businesses, said Anil Bhardwaj, secretary general of FISME, an industry group representing micro and small enterprises, told Reuters.The commerce ministry has maintained that any foreign access to procurement markets will be tightly controlled, limited to non-sensitive sectors, and matched with reciprocal access for Indian firms abroad.For Indian exporters, this could open up new global tendering opportunities while giving New Delhi a bargaining chip in trade talks. 'Opening procurement to foreign firms on a reciprocal basis offers an opportunity for Indian businesses in overseas markets as well,' added Bhardwaj.
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