Allaying fears that allowing UK businesses to participate in India's public procurement sector under the India-UK trade pact may hurt local enterprises—especially MSMEs—Commerce Ministry officials have said that the decision will mutually benefit both countries.
The ministry clarified that Indian suppliers will be able to participate in the UK’s public procurement market, which is worth approximately $122 billion. In return, India opens up a procurement market estimated at $114 billion to UK suppliers.
The move will allow Indian suppliers to bid for contracts in the UK's National Health Services (NHS) and other public sector bodies, including in sectors such as services, construction, and financial services. A Commerce Ministry note said the trade pact is expected to significantly boost NHS procurement of Indian APIs and high-end generic drugs, which currently account for 25% of NHS prescription drugs. NHS’ annual procurement spend stands at around $36 billion.
Indian suppliers will also be eligible to participate in procurements across major service sectors such as IT services, construction, financial services, and insurance.
Officials further noted that, for the first time, the UK has agreed to binding commitments to provide non-discriminatory treatment to Indian suppliers under its Social Value regime. “Indian companies will be treated on par with local suppliers,” an official said.
To protect Indian interests, 'asymmetrical thresholds' have been established. “UK suppliers can only participate in Indian public procurement contracts valued above ₹5.5 crore, while Indian suppliers can bid for UK contracts above ₹1.6 crore,” the official added.
There are additional safeguards for the Indian MSME sector. India has secured a complete carve-out for its MSME preferential procurement policy, the official said.
Regarding the Make in India policy, the ministry clarified that UK suppliers will only be eligible to participate as deemed “Class-II local suppliers” in domestic tenders above the agreed thresholds. Indian suppliers, in contrast, will continue to receive preferential treatment as “Class-I local suppliers” in the UK.
Besides, UK suppliers will only have market access to procurement by non-sensitive central-level entities. Procurement by Central Public Sector Undertakings (CPSUs) and sub-central entities—such as state and local governments—has been excluded from the agreement.