India-UK FTA Unveiled: UK Firms Can Bid on Select Government Contracts Above ₹200 Crore

In a pioneering move under the new India-UK Free Trade Agreement (FTA), UK companies will be able to bid on Indian central government tenders-but only for procurements worth more than ₹200 crore. Union Commerce and Industry Minister Piyush Goyal made the announcement, making clear that access would be strictly for non-sensitive central government entities alone, while state and local government contracts will still be out of bounds for UK bidders.

 

Eligibility Threshold:

UK suppliers can bid only in central government tenders over ₹200 crore, keeping smaller contracts open to domestic players and Indian MSMEs.

 

Restricted Market Access:

The FTA limits UK companies to non-sensitive central government organizations, specifically excluding areas such as defence, railways, and core infrastructure to protect national interests and strategic sectors.

 

Class II Local Supplier Status:

UK businesses with only 20% UK content will be categorized as 'Class II Local Suppliers' under the Make in India policy-a tag that was heretofore reserved for Indian companies with higher local content. This is a major policy shift, but Indian suppliers with more than 50% local content (Class I) will continue to receive priority.

 

Shielding MSMEs:

The step has come in the backdrop of alarms rung by Global Trade Research Initiative (GTRI) and industry players about how more foreign competition might elbow out Indian MSMEs that rely on defended access to public procurement for existence and growth.

 

Strategic Safeguards:

The administration has provided safeguarding carve-outs for MSMEs and reserved policy instruments that support local manufacture, innovation, and jobs as part of programmes such as Make in India and Atmanirbhar Bharat.

 

India's government procurement market, worth almost $600 billion a year, is still a strong instrument of industrial policy, while it opens limited doors to international competition under the FTA.

 

Sources: News24, The Tribune, Economic Times, Business Standard