India to Open Government Contracts to Foreign Firms on Reciprocal Basis

Updated: May 23, 2025 12:59

Image Source: The Financial Express

India is reportedly planning to allow foreign firms, including those from the U.S., to bid for government contracts on a reciprocal basis, marking a significant shift in its procurement policies. The move is expected to enhance competition, improve efficiency, and reduce costs in public sector projects.

Key Highlights:

Reciprocal Access: Foreign companies will be allowed to bid for Indian government contracts, provided their home countries offer similar access to Indian firms.
Boost to Efficiency: The policy aims to reduce procurement costs, which currently burden taxpayers due to limited competition.
Impact on Local Firms: While Indian companies have traditionally enjoyed preferential treatment, the new framework will push them to compete globally.
Trade Negotiations: The decision aligns with India’s ongoing trade discussions with the U.S., UK, and EU, where government procurement access has been a key issue.
Sectoral Implications: The policy could impact infrastructure, defense, and technology contracts, opening doors for global players.

India’s government procurement market is valued at $600 billion, making it a lucrative opportunity for foreign firms. The policy shift is expected to drive innovation and cost-effectiveness, while ensuring fair competition.

Source: Moneycontrol, The Week, Federal Register