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Overview
The UK-India Free Trade Agreement (FTA), also known as the UK-India Comprehensive Economic and Trade Agreement (CETA), is India’s first trade deal with a comprehensive government procurement chapter and market access schedule. For UK businesses, this is a major breakthrough. It opens many of India’s central government tenders to UK bidders for the first time, creating access to tens of billions of pounds worth of contracts that were previously difficult to reach.
India’s public procurement spend is vast, accounting for around 20% its GDP. With the FTA, UK firms can now compete for major Indian government contracts under clear and fair rules. In return, Indian suppliers gain access to UK central government contracts, which represent a procurement market worth approximately £90 billion annually.
This agreement ensures open, fair, and transparent procurement processes in both countries. For UK exporters, it marks a new era of opportunity in India’s dynamic economy.
Opportunities for UK businesses
The UK-India Free Trade Agreement entered into force on 15 July 2026. Before the FTA, India’s procurement market was largely closed to foreign bidders. Global tenders were typically allowed only for very large projects, often above 200 crore Indian rupees (INR) (approximately £19 million). This excluded most UK firms from participating in a significant portion of Indian government contracts.
Under the FTA, thresholds for foreign participation have been dramatically lowered. UK companies can now bid for Indian central government contracts starting at around 5.5 crore INR (approximately £480,000) for goods and services. This opens thousands of tenders that were previously inaccessible.
For UK businesses, this means access to a huge new market, equal treatment in bidding, and a unique advantage under India’s ‘Make in India’ policy that allows UK-originating goods and services to qualify for preferences as ‘local suppliers’ for covered contracts.
Coverage and thresholds
India’s coverage includes 51 central government ministries and departments, plus around 28 central public sector enterprises. This means most major Indian agencies – such as Railways, Health, Finance, and Energy – are open to UK bidders. Sensitive departments like Defence, Home Affairs, IT and Space remain excluded.
The procurement chapter applies only to central government procurement. State-level contracts in India are not covered.
The UK’s coverage includes 48 central government bodies, such as ministries and agencies, and some additional entities like certain colleges. Devolved administrations and local authorities in the UK are not covered.
Value thresholds
Contracts above the following values are subject to FTA rules:
- In India, goods and services contracts apply at or above 450,000 special drawing rights (SDR) (approximately 5.5 crore INR or £480,000), and construction contracts apply at or above 5 million SDR (approximately 62 crore INR or £5.3 million).
- In the UK, goods and services contracts apply at or above 130,000 SDR (approximately 1.6 crore INR or £138,000) and construction contracts apply at or above 5 million SDR (approximately 62 crore INR or £5.3 million).
Contracts below these values remain under domestic rules. India’s thresholds are significantly lower than its previous foreign tender limits, which means many medium-sized tenders are now accessible to UK firms.
Sectors covered
All types of goods, services, and construction services are covered except for specific exclusions listed by each side. India’s exclusions focus on security-related purchases such as defence and police, and to allow for their domestic SME policies. In practice, UK companies will find opportunities across infrastructure, transportation, energy, healthcare, IT, education and other civilian sectors. For example, procurement by Indian Railways, public health ministries and power companies is open under the FTA.
Key procurement rules and obligations
The agreement sets out clear obligations to ensure fairness and transparency in covered procurements. Procuring entities cannot discriminate based on supplier nationality. UK bidders must be treated no less favourably than Indian bidders, and vice versa. This means a contract cannot be denied to a UK firm simply because it is foreign.
Covered tenders must be conducted through open competition unless valid exceptions apply. Tender notices must be advertised online on official portals with free access to bid documents. India uses the Central Public Procurement Portal (CPPP) to publish tenders open to UK suppliers and award results. UK companies can register and bid online using the portal without unnecessary paperwork.
Qualifications and technical specifications must be objective and relevant to the contract. Procuring entities cannot enforce offsets or forced local investments as a condition of bidding. They also cannot require prior experience in the country as a prerequisite. For example, an Indian tender can ask for experience in similar projects but cannot insist on past contracts in India, which is a major advantage for new UK entrants.
If a bidder believes the rules were not followed, they have the right to seek a domestic review or appeal in the procuring country through clearly defined obligations in the agreement both parties must adhere to. This means UK suppliers can challenge an Indian tender decision through Indian review bodies or courts, and Indian suppliers can do the same in the UK. These obligations mirror those in the World Trade Organization Government Procurement Agreement and ensure that UK firms can bid in India under conditions similar to UK tenders.
Exceptions exist for emergencies or cases where no suitable offers are received, but these are strictly limited. Routine preference for domestic firms beyond the structured local content policy is not allowed.
India’s procurement policy normally gives preference to local suppliers based on local content. Under the FTA, UK suppliers gain a unique concession. For covered contracts, India will treat UK-origin goods and services as local content. Any UK bidder whose product or service has at least 20% UK content by value will be deemed a ‘Class-II local supplier’. This grants UK companies domestic status in Indian tenders.
For UK suppliers to qualify for Class-II, they must satisfy two conditions. These are that the good or service originates from the UK and satisfy the 20% UK local content threshold.
When assessing the percentage of local content for goods, India uses the following calculation:
To calculate the UK content percentage:
- subtract the value of non-UK imported content from the total value of procurement
- divide the result by the total value of procurement
- multiply by 100
When using this calculation, non-UK imported content includes the value of imported goods, components and associated customs duties.
When assessing the percentage of local content for services, India uses the following calculation:
To calculate the UK content percentage:
- subtract the value of imported manpower from the total value of procurement
- divide the result by the total value of procurement
- multiply by 100
For the calculation, the value of imported manpower is the cost of foreign labour and imported service components. Under India’s rules, Class-I local suppliers with 50% Indian content get first preference in purely domestic tenders, often with an opportunity to match lower bids. Class-II local suppliers with at least 20% content can bid, but a Class-I supplier may win if within a certain price margin. Non-local suppliers with less than 20 per cent local content are usually excluded from participating. Under the FTA, UK companies avoid being in that non-local category. They qualify as Class-II if they meet the 20% UK-content threshold.
This is a first for any trade partner. No other country’s businesses count as local ‘Make in India’ except India itself. It significantly lowers the barrier for UK firms, allowing them to bid on contracts that India would otherwise reserve for domestic vendors. UK companies cannot become Class-I suppliers through use of UK content exclusively, which remains reserved for those with more than 50% Indian content. However, UK businesses can choose to partner or invest in India to increase local content above 50% and attain Class-I status, though this is not required to participate.
For UK bids, having at least 20% UK content is key. It makes the difference between being treated as a local bidder versus a foreign bidder that could be excluded from participation. Most UK products and services will easily meet this since it counts UK-origin value. Ensure you declare this in your bid, where you may be required to submit documentary evidence such as a Certificate of Origin or Origin Declaration. This special provision means UK companies can compete in Indian tenders without needing to wholly manufacture in India. Indian procuring entities will such consider UK bids as they would domestic bids under the FTA.
Opportunities for UK businesses
The FTA opens a wealth of new opportunities in India’s government procurement market. UK businesses can now go after an estimated 40,000 central government tenders in India each year, worth over £38 billion in total. These opportunities span everything from supplying goods such as machinery, medical equipment, and vehicles to services such as consultancy, IT systems and construction projects. These are opportunities that previously either excluded foreign bidders or were not worth the effort due to barriers. With guaranteed access and transparency, UK firms can plan bids confidently.
Nearly all central government sectors are covered. Infrastructure and transport projects such as railways, highways, and metro systems offer major opportunities. Energy and environment tenders include renewable energy projects and power equipment. Healthcare procurement covers medical devices and hospital supplies for public health programmes. Technology and services contracts include government IT systems, digital services, consulting and training. Defence and internal security remain excluded, but these represent a small share of India’s procurement spend. The breadth of government contracts now open is unprecedented.
UK companies will enjoy equal treatment in bidding and improved access to information. The Class-II local status gives UK bidders an exclusive advantage over other foreign competitors. For example, a European or US company without Indian operations might be shut out of a tender, while a UK company meeting the 20% UK content rule can participate. This preferential access can translate into wins in a less crowded field of international competitors.
The tender process is easier under the FTA. With the requirement for open advertising, UK businesses can find opportunities on India’s CPPP without needing local intermediaries. All tender documents must be free to download, and bids can be submitted online. This reduces cost and complexity. Additionally, knowing there is a right to appeal gives more certainty. UK firms can bid without fear of arbitrary rejection with no recourse.
Indian suppliers can bid for UK central government contracts above approximately £138,000, but the UK’s market is generally more open to foreign competition and access than India’s. For UK companies, the real gain is in India. However, UK procuring entities could see more competition, which may drive innovation and value for public money in the UK as well.
UK businesses – from large infrastructure consortiums to specialised small and medium enterprises – should consider exploring Indian government tenders as a new growth avenue. Success may require understanding local tender procedures and possibly partnering with Indian firms for execution, but the removal of formal barriers makes this far more attainable than before. Early movers will have the chance to establish themselves in India’s public sector supply chain ahead of competitors.
Procurement support, portals and resources
When bidding, note your eligibility under the FTA. Ensure you understand and certify your Class-II local supplier status if applicable. This might involve a self-certification of your product’s UK content.
UK companies entering the Indian market can leverage a range of official government portals for procurement opportunities, policy insights, and market access:
Public procurement and tendering platforms
Government e-Marketplace (GeM): gem.gov.in
The Government of India’s primary public procurement portal, enabling businesses to supply goods and services directly to central and state government buyers. It provides access to tenders, reverse auctions, and direct purchase opportunities across sectors.
Central Public Procurement Portal (CPPP): eprocure.gov.in
A centralised platform hosting tender notices and procurement opportunities from various ministries, departments, and public sector undertakings (PSUs).
Manufacturing & Investment Promotion – Make in India: makeinindia.com
Flagship initiative promoting manufacturing investment, with sector-specific opportunities, policy updates, and investment facilitation support.
Invest India: investindia.gov.in
India’s national investment promotion agency offering market intelligence, sector reports, and facilitation services for foreign investors, including advanced manufacturing.
Industrial & MSME Ecosystem – Udyam Registration (MSME Portal): udyamregistration.in
Official portal for MSME registration, relevant for UK firms partnering with or setting up joint ventures with Indian SMEs.
Standards, Compliance & Quality Infrastructure – Bureau of Indian Standards (BIS): bis.gov.in
India’s national standards body responsible for product certification and compliance – critical for market entry in manufacturing sectors.
Quality Council of India (QCI): qcin.org
Supports quality assurance, accreditation, and standardisation initiatives across industries.
Department for Promotion of Industry and Internal Trade (DPIIT): dpiit.gov.in
Key policy body overseeing industrial development, FDI policy, and ease of doing business reforms.
National Single Window System (NSWS): nsws.gov.in
A digital platform to facilitate approvals and clearances for investors setting up manufacturing operations in India.
Department for Business and Trade support
The Department for Business and Trade (DBT) helps businesses export, drives inward and outward investment, negotiates market access and trade agreements, and champions free trade. Helpful links, tools and services available from DBT and wider government include:
Export Support Service (ESS) team
Get support on how to do business abroad. Businesses in Wales can also access support from Business Wales.
Export Support Service – International Markets (ESS-IM)
DBT's overseas in-market export support service for SMEs with high-export potential. Our International Market Advisers provide tailored support and market introduction information to new and current UK exporters looking to enter or expand into new markets. The service may be accessed globally with International Markets teams in South Asia, China, the Middle East, Africa, Eastern Europe, North America and Latin America.
Sign up to access webinars on how to grow your international sales.
Information on finance and insurance for UK exports.
Trade and investment factsheets
The latest statistics on trade and investment between the UK and individual overseas partners.
Overseas business risk profiles
Information for UK businesses on political, economic and security risks when trading overseas.
Advice and warnings about travel abroad, including entry requirements, safety and security, health risks and legal differences.
Check or report a trade barrier
If you encounter an issue when exporting to any country – report the issue and UK government officials will be able to assess the issue and consider the options we have open to addressing it as appropriate.
Search for your specific product to find applicable tariffs for each market, explore rules of origin and step-by-step help on customs procedures.
Check import duties and allows you to check the status of available tariff rate quotas.
Useful resources
Prior to export, you must be aware of local regulations and import conditions in India that apply to your goods or services. This can include tax considerations, labour laws, intellectual property rules, labelling and packaging regulations, among others.
To seek further information related to local regulations, business culture, or to find a local lawyer, translator, importer, or distributor, you can use the following contacts:
Legal disclaimer
This document is provided as an information guide only and should not be relied on as a substitute for your own research or independent advice.
No investment and/or business decision should be made solely on the basis of information presented in this document. It is recommended that an independent due diligence investigation is conducted before entering into engagement with any individual, business or other organisation mentioned.
The Department for Business and Trade accepts no responsibility for any loss or damage caused to any person as result of any error, omission, inaccurate or misleading statement in this document.
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