Beyond Tariffs: Can the India-UK FTA Open the Door to Billions in Government Contracts?

What Indian and UK Businesses Need to Know About Government Procurement Opportunities Under the India–UK Comprehensive Economic and Trade Agreement (CETA)

Introduction

When businesses think about the India–UK Comprehensive Economic and Trade Agreement (“CETA” or the “India–UK FTA”), the immediate focus is usually on tariffs. Indian exporters are looking at improved access to the UK market. UK companies are assessing whether lower Indian tariffs make their products more competitive.

Manufacturers are examining Rules of Origin. Employers are evaluating the new framework for cross-border employee mobility.

However, another potentially transformative aspect of the Agreement deserves equal attention: government procurement.

Governments are among the world’s largest purchasers of goods and services. Every year, public authorities procure billions of dollars’ worth of infrastructure, defence equipment, information technology, healthcare products, consulting services, engineering solutions, transportation systems, renewable energy projects, educational services and countless other goods and services.

The government procurement provisions of the India–UK CETA therefore have the potential to create opportunities extending far beyond conventional import and export trade.

For qualifying businesses, the commercial question may no longer simply be: “Can we sell our products in India or the UK?” Increasingly, it may become: “Can we sell them directly to the government?” The answer requires careful legal and commercial analysis.

The FTA does not mean that every Indian company can automatically bid for every UK government contract, nor does it grant UK businesses unrestricted access to all Indian public procurement. Access depends on the detailed provisions of the Agreement, including the procuring entity, the nature and value of the procurement, applicable monetary thresholds, sector-specific commitments, exclusions and the procurement rules governing the tender.

For businesses willing to understand this framework, government procurement may become one of the most commercially significant aspects of the India–UK trade relationship.

Why Government Procurement Matters

Government procurement differs fundamentally from private-sector purchasing. A private company generally enjoys broad commercial discretion in selecting suppliers. Government bodies, by contrast, typically operate within statutory procurement frameworks designed to ensure transparency, competition, fairness, accountability and value for public money.

Historically, foreign suppliers seeking access to public-sector contracts have encountered several barriers, including:

• domestic preference policies;
• local content requirements;
• supplier registration requirements;
• restrictive qualification criteria;
• prior local experience requirements;
• complex tender procedures;
• nationality restrictions for sensitive procurements; and
• limited avenues for challenging procurement decisions.

Modern free trade agreements increasingly seek to reduce some of these barriers by establishing reciprocal commitments relating to covered government procurement. The procurement chapter of the India–UK CETA is therefore intended to improve certainty and market access for eligible businesses participating in covered procurement opportunities.

What Does “Access to Government Procurement” Actually Mean?

One of the most common misconceptions surrounding procurement chapters in free trade agreements is that they create unrestricted access to all government tenders. They do not.

Government procurement commitments generally apply only to covered procurement, meaning that several conditions must ordinarily be satisfied simultaneously. These typically include:

• the procuring authority must be a government entity covered by the Agreement;
• the procurement value must exceed the applicable monetary threshold;
• the procurement must relate to covered goods, services or construction services;
• no sector-specific exclusion or reservation should apply; and
• the supplier must satisfy all applicable qualification and tender requirements.

Accordingly, businesses should avoid assuming that the FTA automatically opens every government contract. The correct legal question is considerably narrower: Is this specific procurement by this particular government entity covered by the commitments contained in the India–UK CETA?

Key Principles Likely to Govern Covered Procurement

Although every procurement remains subject to the detailed text of the Agreement and domestic procurement laws, government procurement chapters in modern FTAs generally incorporate several common principles.

1. Non-Discrimination

Covered suppliers are generally expected to receive treatment no less favourable than domestic suppliers in relation to covered procurement. This principle seeks to reduce discrimination based solely on nationality while preserving legitimate policy exceptions provided under the Agreement.

2. Transparency

The procurement framework typically encourages transparent publication of procurement notices, technical specifications, eligibility requirements, evaluation criteria and award decisions. Greater transparency enables foreign suppliers to identify opportunities and prepare competitive bids.

3. Fair Qualification Criteria

Procuring entities are generally expected to apply qualification requirements that are relevant to the procurement and not unnecessarily restrictive. This reduces the risk of arbitrary exclusion of foreign suppliers.

4. Objective Evaluation

Successful procurement systems rely upon clearly defined evaluation criteria that are disclosed in advance and applied consistently throughout the procurement process.

5. Review Mechanisms

Many modern procurement agreements encourage the establishment of review or challenge procedures enabling suppliers to seek redress where procurement obligations may not have been followed.

Which Businesses Could Benefit?

The opportunities created by the procurement chapter are likely to extend across numerous sectors. Potential beneficiaries may include businesses engaged in:

• engineering and construction;
• renewable energy;
• transport and logistics;
• information technology;
• artificial intelligence and digital services;
• cybersecurity;
• healthcare and medical devices;
• pharmaceuticals;
• educational technology;
• professional consulting;
• legal and financial advisory services (where permitted);
• environmental services;
• water treatment;
• defence manufacturing (subject to security restrictions); and
• smart infrastructure projects.

Small and medium enterprises (SMEs) may also benefit, particularly where procurement processes become more transparent and internationally accessible.

Important Limitations Businesses Should Understand

While the procurement chapter creates opportunities, businesses should remain mindful of its limitations.

Not Every Government Entity Is Covered

The Agreement typically specifies the ministries, departments, agencies or public bodies whose procurements fall within its scope. Procurements by entities outside these schedules may remain governed exclusively by domestic procurement rules.

Monetary Thresholds Apply

Government procurement obligations generally apply only where the contract value exceeds specified thresholds. Smaller procurements may therefore remain outside the scope of the Agreement.

Security Exceptions Continue to Apply

Governments generally retain significant discretion over procurements involving:

• national security;
• defence;
• public safety;
• intelligence;
• critical infrastructure; and
• sensitive technologies.

Such procurements may remain exempt from certain FTA obligations.

Domestic Procurement Laws Continue to Govern

The India–UK CETA does not replace domestic procurement legislation. Suppliers must continue complying with all applicable procurement procedures, registration requirements, bid documentation, technical specifications, integrity requirements and contract performance obligations prescribed under domestic law.

Practical Considerations for Businesses

Companies seeking to leverage procurement opportunities under the FTA should adopt a proactive strategy. Key considerations include:

Understand Coverage

Businesses should identify whether the relevant procuring authority and procurement category fall within the Agreement’s schedules.

Review Eligibility Requirements

Qualification criteria, technical standards, financial thresholds and supplier registration requirements should be assessed well before bidding.

Build Local Partnerships

In some sectors, partnerships with local contractors, distributors or consortium members may strengthen bid competitiveness and facilitate project delivery.

Strengthen Compliance Systems

Government procurement frequently requires strict compliance with anti-corruption laws, conflict-of-interest disclosures, sanctions compliance, data protection requirements and ethical procurement standards. Robust internal compliance frameworks can significantly enhance a bidder’s credibility.

Monitor Tender Portals

Companies should actively monitor official procurement portals and tender notifications to identify opportunities at an early stage.

Challenges Businesses May Continue to Face

Despite improved market access, practical challenges are likely to remain. Foreign bidders may still encounter:

• differing procurement procedures across government entities;
• technical documentation requirements;
• localisation obligations outside covered procurement;
• currency and tax considerations;
• bid security and performance guarantee requirements;
• public sector contract management obligations;
• regulatory approvals; and
• sector-specific licensing requirements.

Success will therefore depend not only on legal market access but also on operational preparedness and effective bid management.

Strategic Implications for Indian and UK Businesses

For Indian companies, the Agreement could provide access to procurement opportunities in one of the world’s most mature public procurement markets, particularly in sectors such as technology, digital transformation, healthcare, engineering and professional services.

For UK businesses, the Agreement may facilitate participation in India’s expanding public infrastructure, renewable energy, transport, healthcare and smart-city initiatives, subject to the specific commitments undertaken by India and the applicable domestic procurement framework.

Businesses that integrate procurement opportunities into their broader India–UK market strategy may gain a competitive advantage over those focusing solely on tariff reductions.

Conclusion

The India–UK CETA is often viewed primarily as a tariff-reduction agreement. That perspective, while important, captures only part of its commercial significance.

The government procurement chapter has the potential to reshape how businesses participate in public-sector markets in both countries by improving transparency, creating more predictable procurement frameworks and expanding opportunities for eligible suppliers.

That said, access is neither automatic nor universal. Companies must carefully analyse whether a particular procurement falls within the Agreement, understand the applicable thresholds and exclusions, and continue complying with domestic procurement laws and tender requirements.

Businesses that invest early in understanding the procurement framework, strengthening compliance systems and developing competitive bidding strategies are likely to be best positioned to capitalise on this new avenue of cross-border trade.

As the India–UK economic relationship deepens under CETA, government procurement may emerge not merely as a legal chapter within the Agreement, but as one of its most commercially valuable features.

Last Updated on 27 July, 2026