Free trade pact opens up $122 billion British govt’s procurement market for Indian firms

New Delhi: The public procurement provisions under the India-UK free trade agreement will provide domestic companies non-discriminatory access to the British market worth $122 billion, Commerce Secretary Sunil Barthwal said on Friday.

“For the first time, the UK has agreed to take a binding commitment to provide non-discriminatory treatment for Indian suppliers under the UK’s social value regime,” he said.

On the other hand, India’s commitment under the agreement on public procurement would open up a $114 billion market for the suppliers in the UK.

The UK’s social value regime mandates that public sector bodies consider the wider social, economic, and environmental impact of their procurement activities beyond just financial cost.

This means they must evaluate how a supplier’s work will improve the well-being of communities and the environment, not just whether it is the cheapest option.

It is the second trade agreement that India signed that has a chapter on government procurement.

The first was the one signed with the United Arab Emirates (UAE) in 2022, but it has certain restrictions.

The public procurement provisions of the comprehensive economic and trade agreement (CETA) also protect India’s rules that bar foreign suppliers from contracts below a certain value.

The country’s threshold for goods and services procurement under the agreement has been pegged at Rs 5.5 crore, while for the UK, this limit is Rs 1.6 crore.