UK firms pursue $ 38 billion in India

Excellent feature Agreement on Free Trade India-Uk Last month, the Narendra government’s decision was signed to open a huge Indian public procurement market for UK suppliers.

Usually this includes a number of things that the government buys – from goods and services to contracts for public works such as roads.

About 40,000 high value tenders worth £ 38 billion from federal ministries will be open to business trading in the UK in strategic sectors such as transport, green energy and infrastructure – areas that have been strongly protected from foreign competition.

According to trade experts, access is unprecedented.

This is “much more” than what India has offered in its previous agreement with the United Arab Emirates and “sets a new landmark,” BBC Ajay Srivastava said with Global Trade Research Initiative (GTRI).

According to the agreement, British firms involved in Indian state contracts in the specified industries will be considered virtually along with Indian suppliers, and have access to information about the upcoming state tenders and procurement opportunities in real time.

In addition, UK goods made only with 20% internal contributions can now be provided by the Indian government, which will allow UK companies to flexibility up to 80% of parts or raw materials from other countries and still claim the preference for procurement in India.

The minimum cost of the contract at which these firms can offer state projects has also sharply decreased, as a result of which “the UK can now bid on a wide range of low -cost projects – such as rural roads, schools or IT systems for government agencies, which were previously unavailable.”

But for British companies, realizing this opportunity on earth, it will be easier to say than to do, several experts said the BBC.

While UK suppliers have the right to participate as local grade suppliers, Indian companies will continue to conduct preferential treatment as class I providers, says Dr. Arpita Mukegirji, an expert on international economic relations.

In addition, prices play a key role in winning contracts, and “British companies tend to have higher prices” compared to Indian companies, which will become a major problem for them, she adds.

A more significant deterrent will be the delay of payments and the complex fulfillment of contracts that are “the main hereditary issues when it comes to public procurement in India,” says Shryan Shukla from the Analytical Center for Observer Research.

He says from the procurement of the Central State Sector of India from 2017 to 2020, it has shown that paying providers are often greater than the total average purchase per year.

“This will affect UK players trying to enter the public procurement markets, especially when it comes to government contracts that have many years of outlook and are regulated and political uncertainty,” Mr. Shukla said.

According to Mr. Skula, the contribution and the small enterprises of India, which has led to short-term liquidity problems that often “deduce them from these purchases and redistribution of this business.”

Most of this is reflected in the bad ranking of India – 163 out of 190 – on the implementation of the World Bank’s business bank report, the last round of which took place in 2020.

While everything has improved since these ratings with portals were published as a government electronic market, the central public procurement portal or a recently launched portal on the Internet, which brings more transparency of the public tender-duty process.

According to Ms. Mukegirja, the trading agreement of India and the UK emphasizes transparency in the procurement, but issues issues such as waiting contributions, contracts and fine.

She adds that the transaction eliminates the provisions on resolving disputes on economic and trade agreement within four years after CETA comes into force – these provisions usually determine how disputes are being resolved.

“Business in India is the acquired skill. Over time, companies from the UK will have to learn how to do with the difficulties of the art of winning state tenders and navigation, albeit difficult rules,” says Mr. Shukla.

Despite the non -enterprise problems, allowing foreign players to enter the procurement market of India, there is a far -go policy change.

It shows the intentions of the Indian government to open a space that has long been reserved for local small and medium -sized enterprises, and may reflect Delhi’s concessions ready to give foreign players in future trading agreements, such as The one who negotiates with the USAccording to GTRI.

India is late with the inclusion of deep state procurement conditions in trade transactions, making its current efforts to a Contracting Game, says Mr. Shukla.

It is also a sign, he said, with the Indian government that their own firms can compete with global firms both outward and home. ”

I hope that more foreign players will make more accountability from the Indian government and “help standardize” its tenders and public procurement procedure – marked with payment delays and poor contracts – to global standards.

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