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India Grants UK Firms Limited Access to $600 Billion Govt Procurement Market Under FTA

The trade agreement allows British suppliers to bid on non-sensitive central government contracts as Class II local suppliers, while maintaining carve-outs for domestic MSMEs and 'Make in India' policies.

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Overview

  • The UK-India Free Trade Agreement grants British firms access to India's central government procurement market, estimated at $600 billion annually.
  • Eligible UK suppliers can bid as Class II local suppliers for non-sensitive central-level contracts, requiring 20–50% local content.
  • State and local procurement, along with environment and labor chapters, are excluded from the agreement's scope and dispute settlement mechanisms.
  • Critics warn the move risks crowding out Indian MSMEs and diluting procurement preferences designed to promote domestic manufacturing and job creation.
  • Indian firms do not receive equivalent access to the UK's procurement market, which remains highly restricted to foreign bidders.