After the UAE, India has opened its central authorities procurement (GP) for British corporations underneath the free commerce settlement signed on Thursday, topic to sure situations.
British companies can now bid for tenders, and people with simply 20 per cent UK content material shall be handled as Class 2 Native Suppliers underneath India's Make in India coverage.
Financial suppose tank GTRI mentioned India is providing the “most in depth” concessions in authorities procurement to UK companies underneath the free commerce settlement, marking a strategic shift away from utilizing public procurement as a device for home industrial improvement.
The pact, formally referred to as the Complete Financial and Commerce Settlement (CETA), was signed in London within the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer.
For the primary time, the International Commerce Analysis Initiative (GTRI) mentioned, India will open about 40,000 high-value contracts from central ministries and departments in sectors reminiscent of transport, inexperienced power, and infrastructure to UK bidders. British companies shall be allowed to take part via India's Central Public Procurement Portal (CPPP) and the GeM platform, and shall be granted nationwide remedy for all lined procurements. Importantly, UK-origin items with simply 20 per cent home content material shall be handled as “Class II” native suppliers underneath India's Public Procurement Order (PPO), a classification beforehand reserved for Indian suppliers with 20-50 per cent native content material.
India has, nonetheless, retained the precise to exclude delicate areas like well being, agriculture, MSME procurement, and low-value contracts.
Below the settlement, India has granted unprecedented market entry to UK suppliers within the authorities procurement chapter, which is a serious shift from its historically protectionist method, GTRI Founder Ajay Srivastava mentioned.
“That is essentially the most in depth GP concession India has provided in any FTA so far and marks a strategic shift away from utilizing public procurement as a device for home industrial improvement,” he mentioned.
The 20 per cent native content material rule permits UK companies to make use of as much as 80 per cent inputs from third international locations, reminiscent of China or the EU, whereas nonetheless receiving preferential remedy, successfully diluting the advantages that packages like Make in India and Atmanirbhar Bharat had been designed to guard.
“The entry given to the UK might additionally set a precedent for future FTAs with bigger economies just like the EU or US, doubtlessly eroding India's skill to make use of public procurement as a lever for coverage targets reminiscent of import substitution, home capacity-building, and employment era,” he mentioned.
