India's Push for MSMEs in Global Procurement through FTAs

In a recent statement, Commerce Secretary Shri Sunil Barthwal disclosed that India is actively exploring various strategies, including free trade agreements (FTAs), to empower domestic Micro, Small, and Medium Enterprises (MSMEs) to engage in international public procurement. He emphasized that public procurement constitutes a substantial portion, typically 10-15%, of a country's GDP, which translates to a value of approximately USD 10-15 trillion. It's worth noting that many countries prioritize the inclusion of MSMEs in their procurement processes.

Mr. Barthwal pointed out, "In fact, there are various ways by which countries promote MSMEs; we also support them in India by offering special purchase preferences."

As more FTAs continue to be negotiated and signed, India is actively exploring opportunities to grant MSMEs access to public procurement opportunities in different countries. This strategic move could provide Indian companies with the chance to expand their global footprint while allowing MSMEs from other nations to participate in India's procurement processes. The goal is to foster international trade and cooperation.

The India-UAE free trade agreement, for instance, allows government procurement contracts valued at over Rs. 200 crore to be equally open to both UAE-based firms and Indian firms. Additionally, negotiations surrounding the government procurement chapter are ongoing as part of the proposed India-UK trade pact.

Furthermore, Mr. Barthwal highlighted the importance of integrating MSMEs into global supply chains, stressing their pivotal role in global trade. He noted, "70% of global trade occurs within these chains, offering a plethora of opportunities for MSMEs to tap into the global market." This proactive approach by India aims to create economic opportunities for MSMEs, promote international trade, and bolster the global presence of these enterprises.