Can Indian MSMEs Benefit from the New India-UK Trade Agreement?

What Is the Public Procurement Market?
Public procurement refers to the process by which governments and public sector organizations purchase goods, services, and infrastructure projects from private suppliers. It includes everything from healthcare supplies to construction contracts and IT services.

Under the India-UK trade deal:
Indian suppliers can now bid for UK government contracts, including the National Health Services (NHS), IT services, construction, and financial sectors.
UK suppliers can participate in Indian public procurement but with higher financial thresholds to protect Indian interests.
MSMEs are safeguarded, with India securing exemptions to ensure local small businesses still get preferential treatment.


Key Benefits for Indian Businesses
Access to NHS Procurement: Indian pharmaceutical companies can supply APIs and generic drugs, which already make up 25% of NHS prescriptions.
Non-Discriminatory Treatment: The UK has agreed to treat Indian suppliers equally under its Social Value regime.
Asymmetrical Thresholds:
UK firms can bid only on Indian contracts above ₹5.5 crore.
Indian firms can bid on UK contracts above ₹1.6 crore, giving them a competitive edge.
MSME Protection: India’s MSME preferential policy remains untouched, ensuring small businesses aren’t overshadowed by foreign competitors.

Key Q&As on the India-UK Public Procurement Deal
1. What is the value of the UK’s public procurement market opened to India?
The UK’s public procurement market is worth $122 billion, now accessible to Indian suppliers under the FTA.
2. How does the NHS benefit from this agreement?
The NHS can now increase procurement of Indian generic drugs and APIs, which already account for 25% of its prescriptions.
3. What safeguards are in place for Indian MSMEs?
India has secured a complete carve-out, meaning MSMEs will still receive preferential treatment in domestic procurement.
4. Can UK companies bid on all Indian government contracts?
No—UK suppliers can only participate in central-level contracts above ₹5.5 crore, and state-level procurements are excluded.
5. What is the ‘Social Value’ commitment in the deal?
The UK has agreed to treat Indian suppliers equally with local businesses in its public procurement process.


Why Is This Important for Competitive Exams?
This topic is crucial for exams like UPSC, SSC, PSC, and banking exams because:
It covers international trade agreements, a key part of the economy section.
It highlights India’s trade policies and MSME protections, often asked in government exams.
Understanding public procurement is essential for economics and current affairs sections.
The India-UK FTA is a significant diplomatic and economic development, making it a probable question in interviews and mains exams.


Final Thoughts
The India-UK trade deal marks a strategic move, giving Indian businesses a global foothold while protecting local industries. For aspirants, grasping this development can provide an edge in current affairs and economic policy questions. Stay updated with MyEntrance.in for more exam-focused insights!