The India-UK free trade agreement has opened access to £38bn ($48bn USD equivalent) worth of Indian government contracts for UK firms across strategic sectors like infrastructure and green energy. While this marks India’s most significant procurement market liberalization to date, British companies face substantial challenges including pricing disadvantages and India’s legacy issues with delayed payments and contract enforcement.
**Who**
The agreement involves UK businesses seeking contracts and Indian government ministries as procurers. Key stakeholders include UK firms bidding for projects, Indian domestic suppliers enjoying preferential status, and trade experts like Ajay Srivastava (Global Trade Research Initiative) and Dr. Arpita Mukherjee (ICRIER) analyzing impacts.
**What**
Under the landmark trade deal signed last month, India has unprecedentedly opened 40,000 high-value public tenders to UK suppliers. These include contracts in traditionally protected sectors like transport infrastructure and renewable energy. UK companies gain ‘Class-II local supplier’ status but remain secondary to Indian ‘Class-I’ suppliers in procurement preference.
**When**
The trade agreement was finalized in July 2025. The procurement access became effective immediately upon signing, with tenders being made available to UK firms in real-time as of August 2025. The BBC report was published on August 12, 2025.
**Where**
The opportunities span federal-level procurement across India, with specific focus on national infrastructure projects. The market opening particularly benefits UK firms seeking contracts in India’s growing renewable energy and transportation sectors.
**Why**
This represents a strategic policy shift by India, signaling confidence in domestic firms’ competitiveness while setting new benchmarks for future trade deals. For the UK, it offers access to one of the world’s largest government procurement markets previously reserved for Indian SMEs.
**How**
UK companies can bid on projects with reduced minimum contract values and flexible sourcing rules (only 20% UK content required). However, they face structural challenges: higher costs than Indian competitors, payment delays averaging over a year, and India’s 163/190 World Bank ranking on contract enforcement.
**Impact**
The market access could intensify competition in Indian infrastructure development but may pressure domestic suppliers. For UK firms, it presents lucrative opportunities tempered by operational risks. India’s payment delays already force many local SMEs out of procurement markets – a challenge now extending to UK entrants.
**What’s Next**
Experts suggest UK companies must develop strategies to navigate India’s complex tendering processes. The agreement may push India toward standardizing procurement systems through portals like Government e-Marketplace. This landmark access sets precedents for India’s ongoing trade negotiations with other nations like the US.
