EU wonít get further access to government business
Online Publication Date: 02 April 2012
Economic Times, India
By Amiti Sen, ET Bureau
2 April 2012
NEW DELHI: India will not concede to EUís demand that European companies be
allowed to participate in procurements made by public sector enterprises in the
country as part of a free trade agreement being negotiated.
New Delhi has said that its commitment on government procurement will not go
beyond the existing domestic provisions that allow foreign companies to bid for
procurements by ministries and departments for self consumption, according to a
The EU has sought unhindered access to Indiaís government procurement market
estimated at about $150 billion per annum.
"The EU has positioned government procurement as a critical area for
signing the free trade deal," the official told ET. "It is insisting
that India should provide market access in Central entities and PSUs, but India
has put its foot down."
The government has stressed that procurement market access being discussed
would cover purchases for government purposes only and not what is done for
commercial sale or resale. That is why PSUs can not be covered. Sourcing by the
Indian Railways and the National Highways Authority of India will also remain
restricted territories for EU companies.
In a meeting with EU trade commissioner Karel De Gucht in Delhi last month,
commerce and industry minister Anand Sharma explained that India was in the
process of formulating a public procurement law which would be mandatory for
all Central government entities engaging in procurement.
Since the draft bill is still being discussed with stakeholders, the
minister said it might not be possible for India to undertake commitments on
areas that are still under discussion.
"India has also clarified that procurement market access being
discussed would cover procurement for government purposes only and not that
done for commercial sale or resale," the official added.
A number of developed countries, including the EU and the US, are keen that
India join the government procurement agreement of the World Trade Organisation
that is a plurilateral agreement signed between 42 member countries. India is
an observer in the GPA meetings, but has so far resisted attempts of other
countries to rope it in.
India has also asked the EU to clarify what India would gain by including
government procurement in the bilateral free trade agreement. According to a
study carried out by the Centre for WTO Studies at the Indian Institute of
Foreign Trade, total government sourcing done by the EU from foreign companies
is less than 1% of total purchases.