India opens govt procurement for UK firms; experts see it as strategic shift

Time of India

24-07-2025

New Delhi:
India
will offer concessions in government procurement to UK firms under the free trade agreement, a move experts see as a strategic shift away from using public procurement as a tool for domestic industrial development.
After the UAE, India has opened its central government procurement (GP) for British companies under the free trade agreement signed on Thursday, subject to certain conditions.
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British firms can now bid for tenders, and those with just 20 per cent UK content will be treated as Class 2 Local Suppliers under India's
Make in India policy
.
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Economic think tank GTRI said India is offering the "most extensive" concessions in government procurement to UK firms under the free trade agreement, marking a strategic shift away from using public procurement as a tool for domestic industrial development.
The pact, officially called the
Comprehensive Economic and Trade Agreement
(CETA), was signed in London in the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer.
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For the first time, the Global Trade Research Initiative (GTRI) said, India will open about 40,000 high-value contracts from central ministries and departments in sectors such as transport, green energy, and infrastructure to UK bidders.
British firms will be allowed to participate through India's Central Public Procurement Portal (CPPP) and the GeM platform, and will be granted national treatment for all covered procurements.
Importantly, UK-origin goods with just 20 per cent domestic content will be treated as "Class II" local suppliers under India's Public Procurement Order (PPO), a classification previously reserved for Indian suppliers with 20-50 per cent local content.
India has, however, retained the right to exclude sensitive areas like health, agriculture, MSME procurement, and low-value contracts.
Under the agreement, India has granted unprecedented market access to UK suppliers in the government procurement chapter, which is a major shift from its traditionally protectionist approach, GTRI Founder Ajay Srivastava said.
"This is the most extensive GP concession India has offered in any FTA to date and marks a strategic shift away from using public procurement as a tool for domestic industrial development," he said.
The 20 per cent local content rule allows UK firms to use up to 80 per cent inputs from third countries, such as China or the EU, while still receiving preferential treatment, effectively diluting the benefits that programs like Make in India and Atmanirbhar Bharat were designed to protect.
"The access given to the UK could also set a precedent for future FTAs with larger economies like the EU or US, potentially eroding India's ability to use public procurement as a lever for policy goals such as import substitution, domestic capacity-building, and employment generation," he said.