In a major development following the conclusion of the India-UK Free Trade Agreement (FTA), the Indian government is preparing to introduce global tendering capabilities on its Government e-Marketplace (GeM) portal. This landmark move will enable international suppliers, including those from the United Kingdom, to bid directly for public procurement contracts issued by Indian government entities.

The GeM portal, currently restricted to domestic procurement, acts as a centralised platform where state and central government departments can buy and sell goods and services. With the rollout of global tendering features, foreign businesses will now be allowed to participate in a market previously dominated by Indian suppliers, especially Micro, Small, and Medium Enterprises (MSMEs).

This change stems directly from the provisions of the newly concluded India-UK Free Trade Agreement, which grants British firms "legally guaranteed access" to India’s expansive government procurement ecosystem. According to a UK government policy paper, this agreement allows British businesses to compete for approximately 40,000 tenders annually, estimated to be worth Rs. 3,800 crore (US$ 444 million).

In addition to global tendering, the GeM platform will also see the introduction of a ‘rate contract’ mechanism, which will allow government buyers to purchase goods and services at pre-approved prices for a fixed duration. This is expected to reduce transaction time and increase efficiency by eliminating the need for repeated bidding processes.

Currently, around 40-50% of the government’s annual procurement is conducted via the GeM portal. For FY25, the GeM platform processed transactions worth Rs. 5,42,000 crore (US$ 63.36 billion). The government aims to push this further to Rs. 7,00,000 crore (US$ 81.83 billion) in FY26, positioning GeM as one of the most significant digital procurement ecosystems in the world.

While the decision to open government procurement to foreign entities is seen as a progressive step towards increasing competition, quality, and transparency, it has not come without concerns. The Global Trade Research Initiative (GTRI) has raised red flags about the potential adverse impact on domestic MSMEs, which rely heavily on government tenders due to preferential policies under schemes like Make in India and the Public Procurement Policy for Micro and Small Enterprises.

The GTRI notes that by allowing UK companies access to central government procurement tenders, Indian MSMEs may be crowded out, especially in categories where price competitiveness and volume discounts are key. These smaller firms, often with limited capacity and lower bargaining power, could face challenges when competing with large foreign players backed by significant capital and global supply chains.

Further intensifying the debate is the classification of British firms under the Make in India policy. Under the FTA, UK suppliers with a minimum of 20% UK-origin content will be designated as “Class Two” local suppliers, placing them on par with several Indian entities. This provision effectively extends preferential treatment to British firms, raising questions about the long-term implications for domestic sourcing.

The Make in India initiative, launched in 2014, was designed to boost local manufacturing and empower MSMEs by offering them priority in public procurement. Allowing foreign firms to benefit from such provisions could dilute the intent of the policy unless adequate safeguards are in place.

Despite the concerns, the government sees this as a critical evolution in India’s public procurement framework. A senior government official involved in the FTA negotiations remarked that internationalising the GeM portal will increase global investor confidence, attract technology-driven vendors, and encourage greater transparency and accountability in government purchases.

From the UK’s perspective, this agreement marks a significant breakthrough, offering British companies access to one of the largest public procurement markets in Asia. The UK’s Department for Business and Trade has hailed the FTA as a milestone for bilateral trade, with the government anticipating a surge in exports and business collaborations in sectors like healthcare, defence, infrastructure, and renewable energy.

For Indian industry bodies, however, the key issue remains balancing foreign competition with domestic support. Many have urged the government to implement thresholds, minimum domestic participation mandates, or exclusive MSME zones within the tendering process to safeguard indigenous firms.

Additionally, experts recommend a tiered approach, wherein global tendering is permitted only above a specific procurement value, ensuring that smaller contracts continue to benefit Indian MSMEs. Others have suggested capacity-building measures to help local suppliers become more competitive in the face of new entrants.

Looking forward, the success of this initiative will hinge on the robust implementation of global tendering guidelines, transparency in vendor selection, and the government’s ability to monitor and mitigate unintended consequences on the domestic industry.

Ultimately, this development underlines India’s strategic intent to deepen global trade partnerships, promote technology transfer, and modernise its procurement ecosystem. The inclusion of global firms on the GeM portal could lead to enhanced service standards, broader vendor diversity, and cost optimisation for the government. However, it also calls for careful policy calibration to ensure that India’s economic growth remains inclusive, with MSMEs continuing to play a central role in nation-building.

In conclusion, India's shift towards global procurement access through the GeM portal marks a bold and transformative step in its economic and trade policy. As it opens the door to international competition, it must also strengthen the foundations for domestic entrepreneurship, innovation, and job creation—ensuring that the benefits of growth are both broad-based and sustainable.

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