The govt is likely to allow U.S. firms to bid for contracts worth over $50 bn, mainly from federal entities

FPJ News Service mumbai

India is opening up a chunk of its protected government procurement market to foreign firms, including the U.S, two government sources said, in a shift that could extend to other trading partners after it was offered to the UK under a trade deal this month, Reuters reported. The government is likely to allow U.S. firms to bid for contracts worth over $50 billion, mainly from federal entities, as it negotiates a trade deal with Washington, the sources said.

Total public procurement - including by federal, state and local governments and state-run firms - is worth an estimated $700 billion-$750 billion per year, according to government estimates. Most is reserved for domestic firms, with 25% set aside for small businesses, although sectors like railways and defence can buy from foreign suppliers when domestic options are unavailable.

Earlier this month, India and the UK agreed on a free trade pact that gives British firms access to federal government contracts in select sectors - covering goods, services and construction - on a reciprocal basis. "In a policy shift, India has agreed to open its public procurement contracts gradually to trading partners including the U.S. in a phased manner and reciprocal manner," said one of the officials, with the knowledge of the matter.