Exclusive: India may let US, foreign firms bid for government contracts, sources say

NEW DELHI, May 23 (Reuters) - India is opening up a chunk of its protected authorities procurement marketplace to overseas firms, including the U.S, 2 authorities sources said, successful a displacement that could widen to different trading partners aft it was offered to the UK nether a commercialized woody this month.

The authorities is apt to let U.S. firms to bid for contracts worthy implicit $50 billion, chiefly from national entities, arsenic it negotiates a commercialized woody with Washington, the sources said.

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Total nationalist procurement - including by federal, authorities and section governments and state-run firms - is worthy an estimated $700 billion-$750 cardinal per year, according to authorities estimates. Most is reserved for home firms, with 25% acceptable speech for tiny businesses, though sectors similar railways and defence tin bargain from overseas suppliers erstwhile home options are unavailable.

Earlier this month, India and the UK agreed connected a free commercialized pact that gives British firms entree to national authorities contracts successful prime sectors - covering goods, services and operation - connected a reciprocal basis.

"In a argumentation shift, India has agreed to unfastened its nationalist procurement contracts gradually to trading partners including the U.S. successful a phased mode and reciprocal manner," said 1 of the officials, with the cognition of the matter.

Only a information of the government's procurement contracts - chiefly linked to national projects worthy astir $50-$60 cardinal - volition beryllium opened to overseas firms, portion authorities and section authorities purchases volition beryllium excluded, the authoritative said.

"Following the UK pact, India is acceptable to unfastened a portion of its nationalist procurement marketplace to the U.S. arsenic well," said a 2nd official.

Both sources requested anonymity, arsenic details of the ongoing talks person not been made public.

The commerce ministry did not respond to requests for remark connected the U.S. connection oregon extending the program to different nations.

India has agelong resisted joining the World Trade Organisation's Government Procurement Agreement, citing the request to support tiny businesses.

In its March study connected overseas commercialized barriers, the U.S. Trade Representative said India's restrictive procurement policies airs challenges for U.S. firms owed to "changing rules and constricted opportunities."

Indian Trade Minister Piyush Goyal visited Washington this week to beforehand commercialized talks, with some sides aiming to motion an interim statement by aboriginal July, officials said.

New Delhi is pushing to clinch a trade deal with the U.S. wrong the 90-day pause connected tariff hikes announced by U.S. President Donald Trump connected April 9 for large trading partners, which includes a 26% tariff connected imports from India.

The commerce ministry said successful a substance connection that UK firms would lone beryllium allowed constricted entree to bid for contracts of non-sensitive national entities, excluding authorities and section authorities procurement.

UK-based suppliers tin bid for Indian tenders supra 2 cardinal rupees ($23.26 million) portion the UK volition connection non-discriminatory entree to Indian suppliers nether its nationalist procurement system, the ministry said.

The authorities has assured tiny manufacture that a 4th of the orders volition beryllium reserved for them, said Anil Bhardwaj, caput wide of the Federation of Indian Micro, Small and Medium Enterprises (FISME), a starring manufacture body.

"Opening procurement to overseas firms connected a reciprocal ground offers an accidental for Indian businesses successful overseas markets arsenic well," helium said.

($1 = 85.9810 Indian rupees)

Reporting by Manoj Kumar; Editing by Raju Gopalakrishnan

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