India to permit US corporations to bid for govt contracts price $50 billion in wider scope for overseas corporations: Report | Mint

India is opening up a bit of its protected authorities procurement market to overseas corporations, together with the U.S, two authorities sources stated, in a shift that might prolong to different buying and selling companions after it was provided to the UK below a commerce deal this month.

The authorities is more likely to permit U.S. corporations to bid for contracts price over $50 billion, primarily from federal entities, because it negotiates a commerce take care of Washington, the sources stated.

Total public procurement – together with by federal, state and native governments and state-run corporations – is price an estimated $700 billion-$750 billion per yr, in line with authorities estimates. Most is reserved for home corporations, with 25% put aside for small companies, though sectors like railways and defence should purchase from overseas suppliers when home choices are unavailable.

Earlier this month, India and the UK agreed on a free commerce pact that offers British corporations entry to federal authorities contracts in choose sectors – protecting items, providers and development – on a reciprocal foundation.

“In a coverage shift, India has agreed to open its public procurement contracts steadily to buying and selling companions together with the U.S. in a phased method and reciprocal method,” stated one of many officers, with the data of the matter.

Only a portion of the federal government’s procurement contracts – primarily linked to federal tasks price round $50-$60 billion – shall be opened to overseas corporations, whereas state and native authorities purchases shall be excluded, the official stated.

“Following the UK pact, India is able to open part of its public procurement market to the U.S. as effectively,” stated a second official.

Both sources requested anonymity, as particulars of the continuing talks haven’t been made public.

The commerce ministry didn’t reply to requests for touch upon the U.S. proposal or extending the plan to different nations.

India has lengthy resisted becoming a member of the World Trade Organisation’s Government Procurement Agreement, citing the necessity to defend small companies.

In its March report on overseas commerce boundaries, the U.S. Trade Representative stated India’s restrictive procurement insurance policies pose challenges for U.S. corporations attributable to “altering guidelines and restricted alternatives.”

Indian Trade Minister Piyush Goyal visited Washington this week to advance commerce talks, with each side aiming to signal an interim settlement by early July, officers stated.

New Delhi is pushing to clinch a commerce take care of the U.S. inside the 90-day pause on tariff hikes introduced by U.S. President Donald Trump on April 9 for main buying and selling companions, which features a 26% tariff on imports from India.

The commerce ministry stated in a textual content message that UK corporations would solely be allowed restricted entry to bid for contracts of non-sensitive federal entities, excluding state and native authorities procurement.

UK-based suppliers can bid for Indian tenders above 2 billion rupees ($23.26 million) whereas the UK will supply non-discriminatory entry to Indian suppliers below its public procurement system, the ministry stated.

The authorities has assured small trade {that a} quarter of the orders shall be reserved for them, stated Anil Bhardwaj, secretary normal of the Federation of Indian Micro, Small and Medium Enterprises (FISME), a number one trade physique.

“Opening procurement to overseas corporations on a reciprocal foundation gives a possibility for Indian companies in abroad markets as effectively,” he stated.

($1 = 85.9810 Indian rupees)