Free trade pact opens up $122 bn British Govt's procurement market for Indian compaines: Commerce Secretary

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 USD 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.

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On the other hand, India's commitment under the agreement on public procurement would open up a USD 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.

For procurement related to construction services, both sides have agreed to a threshold of Rs 60 crore.

The market access under the pact is limited to a few central government entities with higher thresholds around Rs 250 crore across goods, services and construction services.

While the UK suppliers are eligible to participate as Class-II local suppliers if at least 20 per cent of their product or service is from the UK.

Indian suppliers will continue to receive preferential treatment as Class-I local suppliers if their goods or services have more than 50 per cent local content from India.

Further, Indian suppliers will have guaranteed access to the UK procurement being conducted at the central level of government and some at the utilities level.

They will be able to participate in procurement by major government departments, such as the Cabinet Office, Department for Business and Trade, National Highways, NHS Foundation Trusts (Department of Health and Social Care), Foreign, Commonwealth and Development Office, and Department for Education, among others.

In addition, Indian suppliers can participate in government procurement conducted by entities, such as Belfast Metropolitan College, Northern Regional College, and North West Regional College, which are not offered to all trading partners.

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