India-UK FTA: Why US, EU will leverage nod to British firms in govt procurement
'Even if only 5per cent of eligible tenders are won by UK firms, that's Rs 30,000-Rs 35,000crore a year—an unprecedented outflow of statebacked demand to foreign suppliers,' said a senior Indian official. With government capex (capital expenditure) pegged at Rs 11.1lakh crore in FY25, the clause potentially shifts a nontrivial slice of public spending into a bilateral trade corridor.That corridor will be mapped with new plumbing. The FTA mandates a dedicated bilingual procurement portal linking India's central tenders to the UK's system within six months of ratification. All ministries and departments are covered. Public sector enterprises are trickier: only PSUs 'operating on behalf of government' are explicitly listed in Annex15B, leaving strategic sectors like power and oil open to interpretation.Implementation will be phased, with Indian ministries given 180days to build compliance systems and train procurement officers. British suppliers will have access from day one, their own eprocurement infrastructure already aligned with FTA standards.For New Delhi, this is more than a technical adjustment. The wall that just came down has stood for three decades. India has historically treated government procurement as an instrument of industrial policy, not trade. At the World Trade Organization (WTO), New Delhi refused to sign the plurilateral Agreement on Government Procurement and argued that procurement was 'nontrade in nature'.India walked away from the EU and RCEP (Regional Comprehensive Economic Partnership) negotiations when Brussels and Tokyo insisted on procurement chapters. That this firewall fell in a deal with London is a pivot with both economic and political weight. Earlier, New Delhi had agreed for similar provisions in the UAE's Comprehensive Economic Partnership Agreement (CEPA). But at that time, it was argued that Abu Dhabi is largely a trade hub, and the window was more strategic.advertisementYet, even with the firewalls in the FTA , a faint 'London window' remains. UK firms can source Chinese components, assemble or add value in Britain, and still meet the origin criteria to access Indian public contracts. In complex supply chains like electronics and solar equipment, that margin is wide enough for Chinese inputs to ride through the backdoor—without ever being named on the tender.A useful comparison here is the recent UK-US trade deal, where Washington's paranoia about China was baked into every clause. The pact hardwires 'trusted supply chain' provisions, explicitly excludes critical technologies from any thirdcountry sourcing and gives Washington the right to suspend procurement access if a supplier is even partially owned or controlled by an entity linked to Beijing.By contrast, the India-UK FTA opts for a more layered approach: national security exceptions and valueaddition rules are there, but it stops short of USstyle blanket exclusion. Sensitive sectors like defence and telecom are carved out, yet the text leaves breathing space for UK companies to tap Chineseorigin components as long as they are sufficiently processed in Britain. It is a hedged opening that tries to keep Beijing in the shadows, but unlike the UK-US template, still leaves a narrow London corridor through which Chinese supply chains could flow.advertisementCommerce minister Piyush Goyal, unveiling the pact, called it a 'gold standard FTA' that 'balances ambition with sensitivity'. But the balance is precisely what critics are questioning. Ajay Srivastava of the Global Trade Research Initiative (GTRI) calls the move 'a dangerous precedent'.'Allowing UK firms to compete on nearequal terms could crowd out Indian MSMEs (micro, small and medium enterprises), which depend heavily on protected access to government contracts. It also dilutes one of India's last remaining industrial policy tools—procurement preferences—to promote domestic manufacturing, innovation and jobs,' Srivastava told INDIA TODAY.Srivastava's second concern cuts deeper. 'While UK companies gain broad access to India's procurement system, Indian firms remain largely excluded from the UK's closed and highly competitive market. With little reciprocal benefit, this sets a template other partners will now demand,' he explains.That fear is echoed from the swadeshi flank too. The Swadeshi Jagran Manch (SJM) has warned that granting foreign bidders parity in central contracts is a 'slippery slope', undermining atmanirbharta and exposing small Indian suppliers to a shock they are structurally illequipped to handle.advertisementThe political reverberations are already visible in Geneva and Brussels. EU negotiators are privately signalling they will now lift the India-UK text and drop it into the stalled EU-India FTA. Washington, where procurement access is always on the table, will likely do the same. As a former Indian negotiator puts it: 'Once you write it into one treaty, you've created a benchmark. You can't put the wall back up.'The government's defence rests on reciprocity and strategy. The UK's public procurement market is estimated at 400billion, and under the FTA, Indian firms theoretically gain access to 122billion of that. The agreement requires both sides to publish tenders on a single online portal, free of charge, with full transparency.Sensitive areas—defence, railways, atomic energy and all statelevel procurement—are carved out of the text. Government officials describe the 20per cent local content rule as 'a bridge to Make in India, not a bypass', arguing that it is designed to draw foreign firms into domestic manufacturing rather than replace it.But the asymmetry is hard to miss. Less than 10per cent of UK public contracts go to foreign firms under London's strict procurement regime. In India, by contrast, British suppliers with a light manufacturing footprint could now bid aggressively in sectors from power transmission to urban infrastructure. MSMEs, which enjoy a 25per cent reservation in government tenders and depend on policydriven demand, fear being squeezed as price competition intensifies at the top end of the market.advertisementThe story here is not just economics but ideology. For years, India's trade negotiators carried a simple mantra into every FTA: tariffs are flexible, procurement is sovereign. On July24, that mantra changed. Whether this is strategic statecraft, using procurement access to pull in UK capital and technology, or a costly concession traded away for limited tariff gains will take years to judge. What is clear today is that India has crossed a line it held for a generation. And as Brussels, Tokyo and Washington read the fine print, they see more than a clause. They see a gate, newly opened.Subscribe to India Today Magazine- EndsTune InMust Watch
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India Today
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Palace to polls? Why the BJP is wooing the royalty
Madhya Pradesh chief minister Mohan Yadav is known to have a penchant for offsite cabinet meetings. Whenever he is in a mood to indulge his cabinet colleagues or send out a political signal, the venue shifts from the cabinet room on the fifth floor of Vallabh Bhavan—the state secretariat in Bhopal. On May 20, it was the Rajwada, the 200-year-old palace of the Holkars, the erstwhile rulers of Indore, that was the venue. CM Yadav sat in an ornate chair, while his cabinet colleagues were arranged in a manner that evoked the impression of a Holkar Durbar. The meeting was to discuss the plans for the upcoming 300th birth anniversary of Maharani Ahilyabai Holkar, and the commemorative events to be held in her enactment of this piece of royal theatre was not lost on anyone. 'There's nothing objectionable about celebrating an icon like 'Devi' Ahilyabai,' a source said. 'But it's the royal makeover of an otherwise routine cabinet meeting that stood out.' This is not all. The BJP-ruled MP has also launched 'Virasat se Vikas' (heritage to development), a programme to revive the legacies of Rani Durgawati, Rani Avanti Bai, Ahilyabai, Raja Bhabhut Singh, as well as the legendary King is getting recognition elsewhere, too. Gujarat, for instance, is planning to dedicate a whole museum—the Museum of Royal Kingdoms of India (MORKI)—to record the contributions of the princely states (see Mission Museum). Expected to open in 2027, the Rs 260 crore project will come up next to the Statue of Unity in the Narmada BJP is clearly going through a phase of royal obsession. Aditya Pratap Deo, associate professor of History at St Stephen's College, Delhi, and member of the erstwhile royal family of Kanker in Chhattisgarh, explains it thus: 'The BJP and RSS represent a form of cultural nationalism where custom, tradition and history form the bedrock of their political imagery of a pristine nation. As polities described as monarchial have been the commonest and most remarkable type of high politics and political system in South Asia, and been integral to a certain understanding of the nature of Indian civilisation, they have found greater acceptance in the political discourse of post-liberal India.' PROJECT RAJThough the Congress has counted many royals in its ranks—Karan Singh, the titular maharaja of the princely state of Jammu and Kashmir, Amarinder Singh (now in the BJP) of the Patiala royal family, the late Madhavrao Scindia of the erstwhile Gwalior ruling family, Rajya Sabha member and former MP CM Digvijaya Singh of Raghogarh the most prominent among them—the party's relationship with the princely states was always prickly since the abolition of the privy purses in 1971 besides the withdrawal of other privileges, such as the right to hold an unspecified number of weapons and use royal titles. The following year, as former IAS officer Ranjitsinh, member of the erstwhile ruling family of Wankaner, points out, 'The Wildlife Protection Act hit the former royals' fortunes not just because they indulged in shikaar but also because many of them ran commercial shikaar companies that attracted foreign clients.'advertisementMore recently, in a media article in November 2024, Congress leader Rahul Gandhi drew the ire of several erstwhile rulers when he referred to maharajas and nawabs as collaborators of the East India BJP is now seeking to correct this 'historical wrong', which it sees as a one-sided narrative spread by the colonialists to suit their interests. 'Royal families,' says Dr Pankaj Sharma, director of the department of archaeology and museums in the Gujarat government, 'were often painted as antagonists who were bad administrators, disliked by the locals, and who succumbed to the British Raj, compromising public interests, to maintain their privileges. Their contributions and sacrifices in integrating with the Union of India, the public welfare initiatives, their rich cultural heritage, stories of their valour and service to society have been overlooked.'advertisementThe RSS is in agreement with the BJP's viewpoint. 'The RSS is absolutely in agreement with monarchy. It is in keeping with the concept of Hindutva. India's glorious past includes royalty, which needs to be celebrated,' says a source close to the Sangh. Plus, the fact that many former royals continue to control trusts that administer temples helps the BJP's Hindutva is, of course, a political logic to the BJP's royal overtures. As the party expands its reach across geographies and communities, it has been seeking icons it can use to rally voters, building statues or monuments in their name. Royals fulfil that purpose equally. Witness the prime minister's recent invocation of the legacy of Rajaraja Chola and his son Rajendra Chola I during a trip to Tamil OF THRONESThe BJP's strategy is evident in the apparent relaxation of norms around ticket distribution and its policy of denying tickets to the kin of elected representatives. For instance, Vishvaraj Singh, the titular maharaja of Mewar and the BJP MLA from Nathdwara, Rajasthan, was fielded in the December 2023 assembly election and, six months later, his wife Mahima Kumari, too, was nominated for the Lok Sabha. Both won their respective in Madhya Pradesh, tribal leader and minister Kunwar Vijay Shah, who hails from the erstwhile estate of Makrai, was nominated from Harsud. His brother contested in neighbouring Timarni, though he lost to his nephew from the the east, the BJP appointed party veteran and former royal Kanak Vardan Singh Deo of Balangir as a deputy CM of Odisha in 2024, while his wife Sangeeta Singh Deo was re-elected to the Lok Sabha. In West Bengal—a state once home to India's longest-running communist government—it nominated Amrita Roy, the 'Rajmata' of Krishnanagar, for the Krishnanagar Lok Sabha seat, though she lost the election. Earlier, in 2023, the party had sent self-styled Koch royal Anant Maharaj, who claims to be king of the Rajbanshi community in North Bengal, to the Rajya Sabha. His election was widely seen as an attempt to consolidate the Rajbanshi vote in the politically volatile region around Cooch Behar and Alipurduar. Likewise, the party nominated Kesridevsinh Jhala of Wankaner in 2023 and Devendra Pratap Singh of the former princely state of Raigarh to the Upper House in 2024, from Gujarat and Chhattisgarh, does cultivating royalty get the BJP at a practical level? 'In the initial years after Independence, many members of the erstwhile royal families moved to cities from their places of residence. But, with tourism picking up, properties being converted into hotels, and many of them joining politics, the connect with the local people continued. In many instances, this translated into electoral advantage, making political parties nominate members of royal families,' explains Ranjitsinh. Their royal status gives them winnability, which is a key factor in ticket distribution for the BJP, as MP minister Kailash Vijayvargiya points BJP's royal turn is not without its biases, though, often shaped by religious and historical narrative. In Bhopal, for example, party MP Alok Sharma has been running a campaign against the erstwhile ruling family, blaming the last nawab Hamidullah Khan for delaying the merger and harbouring plans to join Pakistan post-Independence, a charge that has often been levelled against non-Muslim princely states too. And who can forget the furore caused by senior BJP leader Parshottam Rupala shortly before the 2024 election, when his remark that the erstwhile maharajas capitulated to Britishers, broke bread with them and even married off their daughters to them, had the entire Kshatriya community up in arms. Rupala was nonetheless fortunate to win his constituency Rajkot that year. Also worth noting is the BJP government's 2019 amendment to the Arms Act, which reduced the number of licenced weapons an individual can possess from three to two. A similar move during the UPA era had been stalled following interventions by MPs, particularly those from royal PRAGMATISMWhat do the royals themselves think of the BJP's outreach? 'The blessings of the Almighty and our ancestors, as well as our conduct, have fortunately earned the continued confidence of the public. I am thankful to the party (BJP) and the people for giving me an opportunity to contribute to our country's development,' says Vishvaraj. Digvijaya, however, doubts 'the BJP's faith in the tenets of the Constitution, which espouses equality for all'. Claiming that the party has a soft corner for royalty, he says: 'As far as my family is concerned, we chose the path of democracy and did not join the Jana Sangh or the BJP, although they were very keen.'From a historical perspective, royalty, says a section of sociologists, has always aligned with the winning side. 'Royalty, like political actors of all types, does survive through tactical alliances, etc. Just as we have politicians who are consummate survivors, so too are there royal dynasties that have managed to hold relevance despite all kinds of historical changes and challenges,' says author Manu Pillai. 'It is a bit simplistic to reduce the princely legacy to one of 'collaborators with the Raj'; it is like applying black and white lenses to present-day politics, which actually has many more layers and complexities.'A ROYAL REVAMPThat said, royals are trying to reinvent themselves in the modern world. Zamindars and rajas—cast as evil and exploitative in the Bollywood films of the 1980s and '90s—are now increasingly celebrated in popular culture. Their public image has shifted, too, with erstwhile royals now regulars on the conclave circuit, on podcasts and chat shows. Radhika Raje Gaekwad of the former Baroda royal family was recently invited by a newspaper to write about an OTT show that did not paint a very charitable picture of her ilk. 'There is definitely an allure, and it began when magazines like Hello, which had covered European royalty, came to India. The magazines featured royals on their covers and their palaces were opened up for people to see them through their pages. Social media, too, has a major role to play as it provides royals a platform to tell their stories like they wanted to,' she Khanna, a communication professional, says earlier, if a glossy featured an industrialist, a sportsperson and a professional, today it also covers a former royal as part of the spread. 'Many among the younger lot of erstwhile royals have studied at foreign universities. Having returned, they are now pursuing careers relevant to the times and have played a major role in changing the narrative,' says Khanna, who set up Royal Fables in 2010, a platform that showcases royal India.'Our families are often subjected to statue politics, unwarranted comments and misrepresentation by politicians and the entertainment industry,' says Vishvaraj. 'True recognition will come when both historical and contemporary records are presented factually, and strict action is taken against those who malign our families and ancestors for personal or political gain.'Until then, the erstwhile rulers will throw their lot with the party that is the real ruler in exchange for preserving their political and cultural relevance.—with Dhaval S. Kulkarni, Rohit Parihar, Jumana Shah and Arkamoy Datta MajumdarSubscribe to India Today Magazine- EndsMust Watch
India Today
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Despite war and warnings, US traded more with Russia than ally Ukraine
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