Procurement Act 2023 (Specified International Agreements and Saving Provision) (Amendment) Regulations 2026
(Limited Text - Ministerial Extracts only)
Read Full debate
Baroness Anderson of Stoke-on-Trent
That the Grand Committee do consider the Procurement Act 2023 (Specified International Agreements and Saving Provision) (Amendment) Regulations 2026.
Relevant document: 50th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Secretary, Cabinet Office (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, I am going to speak slightly slowly so that my officials have time to swap out, because they are two different teams. The purpose of this statutory instrument is to implement the procurement chapter of the UK-India comprehensive economic and trade agreement, CETA, via an amendment to the Procurement Act 2023. The UK-India CETA was signed on 24 July 2025 and is one of the most significant bilateral trade agreements that the UK has completed since leaving the European Union.
India is one of the economic heavyweights of the 21st century. It has the highest growth rate in the G20 and is likely to become the third-largest economy in the world by 2029, but India’s markets are also behind some of the highest barriers in the world. The deal that we have secured goes well beyond India’s offering to other countries, opening the door for UK businesses on an unprecedented basis, especially in respect of government procurement. Some noble Lords present may have attended the Lords debate on the UK-India trade agreement last week, when a variety of policy issues pertaining to the agreement were discussed. Today’s debate is focused solely on the procurement chapter of the agreement.
India spends an estimated 20% of its GDP, or £500 billion, on public procurement. Given that India’s nominal GDP was estimated to be £2.74 trillion in 2022 and is projected to reach £7.06 trillion by 2035, this is a phenomenal opportunity for UK suppliers. The procurement chapter unlocks unprecedented access to India’s federal procurement market, covering £38 billion-worth of contracts a year in such sectors as advanced manufacturing, healthcare, construction and infrastructure, and clean energy. For the first time, UK companies will be able to access India’s procurement portal. British businesses will have access to India’s covered entities in respect of procurements above £478,000 for goods and services and £5.3 million for construction services.
We have gained exclusive treatment under the “Make in India” policy. UK bidders will be treated as class 2 suppliers under “Make in India” if at least 20% of their product or service is from the UK or India, giving UK suppliers unprecedented access to India’s federal procurement market not available to other foreign suppliers. We have also reached commitments on fairness, openness and transparency, including the use and accessibility of e-procurement systems, requirements for the publishing of notices and awarding of contracts and domestic review procedures for businesses to bring a challenge if the chapter’s rules have not been followed correctly. The agreement that this Government have secured was a momentous achievement. Others have been trying to get a deal like this for years and failed, but this Prime Minister, along with the then Business Secretary and Trade Minister, delivered.
We are clearly leading the way, as the EU and India have now reached political agreement on their own trade agreement, where it seems that the UK deal was used as a baseline. However, we retain first-mover advantage, including unique access to India’s £38 billion federal procurement market, which the EU has not obtained. As part of the Constitutional Reform and Governance Act 2010 process to enable parliamentary scrutiny of treaties, the CETA was laid in Parliament on 21 January 2026 and cleared the CRaG scrutiny process on 5 March. This SI was laid on 19 January 2026 to bring the CETA into force as quickly as possible, while allowing for the necessary parliamentary scrutiny, to allow businesses to take advantage of the agreement and deliver growth across the country.
Baroness Finn (Con)
My Lords, I thank the Minister for introducing these regulations and for clearly setting out their purpose. As she explained, these regulations amend the Procurement Act 2023 to add the UK-India comprehensive economic and trade agreement to the list of specified international agreements in the Act. In doing so, they give effect in domestic law to the procurement provisions contained in that agreement. Under the World Trade Organization’s agreement on government procurement, the United Kingdom is required to ensure that countries with which we have concluded relevant trade agreements are given non-discriminatory access to public procurement markets. These regulations are therefore a technical but necessary step to ensure that the United Kingdom meets those obligations.
While we support the regulations, it is worth briefly reflecting on the wider context in which they sit. The UK-India agreement was long anticipated and presents significant potential opportunities for trade between our two countries. However, we have concerns about some of the provisions in the agreement and about what was not included.
The inclusion of services in any agreement with India was widely regarded as a central objective of the United Kingdom’s negotiating position. It is therefore disappointing that a number of key services sectors, including the legal sector, appear not to have secured the level of market access that had been hoped for. Given the strength of the UK services economy, that omission represents a missed opportunity. Similar concerns were raised during the debate in the other place, where it was noted that securing stronger outcomes for services had been a central priority during earlier negotiations.
Concerns have also been raised regarding the operation of the double contributions convention within the agreement, which may mean that companies employing Indian workers in the United Kingdom are not required to pay employer national insurance contributions on their salaries. Although labour mobility provisions are a common feature of modern trade agreements, it would be helpful if the Minister could clarify how the Government intend to ensure that these arrangements operate fairly and do not inadvertently disadvantage British workers.
I would also welcome the Minister’s comments on the point raised by the Secondary Legislation Scrutiny Committee on the timing of this instrument. As the committee observed, the regulations were laid shortly before the treaty itself was formally laid before Parliament, meaning that the scrutiny periods for the treaty and its implementing legislation run in parallel. Can the Minister explain the Government’s reasoning for adopting that approach and reassure the Grand Committee that Parliament will have had sufficient opportunities to scrutinise both the agreement and the legislation required to implement it?
Finally, Ministers have suggested that the procurement provisions of this agreement will open up significant opportunities for UK businesses by providing access to India’s federal procurement market. That is clearly welcome, but it would be helpful to hear how the Government intend to support UK firms, in particular small and medium-sized enterprises, in navigating and accessing those opportunities in practice.
With those brief remarks, I reiterate that these regulations are a necessary step to give effect to the procurement provisions of the agreement. Nevertheless, we will continue to take a close interest in how the wider deal operates in practice and whether it ultimately delivers the benefits that British businesses and workers were promised.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, this has been part 2 of the “Finn and Anderson show” today. I thank the noble Baroness, Lady Finn, for the points she raised. I was a little disappointed that she did not manage to get in a reference to those celebrating this deal—not least the people of Scotland, who are delighted about access to the Indian whisky market; it has been life-changing for that sector.
I will respond to some of the specific questions the noble Baroness asked me. I will reflect on Hansard after the debate, and I am sure she will pick me up on anything I miss.
On the double contributions convention, the UK Government already have similar agreements in place covering Chile, Japan, South Korea, the 27 EU member states, Iceland, Liechtenstein, Norway, Switzerland, Barbados, Canada, Israel, Jamaica, Mauritius, the Philippines, Bosnia-Herzegovina, North Macedonia, Serbia, Montenegro, Kosovo, Turkey and the USA. We know how to do these agreements and we are effective at them. The noble Baroness will be aware that the previous Government also operated within this space. There is little to be concerned about.
The noble Baroness is absolutely right that our focus should be on how we support businesses so that they can access the benefits of this procurement chapter. It is vital that we ensure that British businesses can utilise the benefits of this chapter if we are to reap the economic rewards of this unprecedented access to India’s market. The Department for Business and Trade has a significant presence in India, with one of the biggest in-country overseas teams in the world, behind only the US and China. This consists of sectoral experts who work directly with UK companies to help them enter, grow and expand into the Indian market. Alongside this, the team has staff focusing on trade policy, market access, investment promotion, and marketing and communications, under the leadership of HM trade commissioner for South Asia. The DBT works in partnership with Foreign Office teams in India, who also have objectives to support UK economic growth.
On the timing of the instrument, as part of the Constitutional Reform and Governance Act process to enable parliamentary scrutiny of treaties, the Government are required to lay a relevant treaty, alongside an Explanatory Memorandum, for 21 sitting days before it can be ratified—unless either House adopts a Motion that such a treaty should not be ratified—subject to any additional procedural steps required by the treaty also being concluded. Although it is not a legal requirement for treaties to have completed the process set out in the CRaG Act prior to implementation in domestic law, it has been an informal convention to lay before Parliament the implementing legislation after the treaty in question has undergone the initial 21 days.
Exceptionally, in this case, the CETA was laid in Parliament on 21 January 2026 and formally entered the CRaG process shortly after the draft instrument was laid before Parliament on 19 January 2026, in accordance with the affirmative procedure. The CRaG process concluded on 5 March. This approach has been necessary due to the Government’s desire to bring the CETA into force as quickly as possible, while allowing necessary parliamentary scrutiny, to allow businesses to take advantage of the agreement and to deliver growth across the country.
I hope I have answered all the noble Baroness’s questions. To conclude, this historic agreement marks a major milestone in the UK-India relationship and is one of the most significant bilateral trade agreements that the UK has concluded since leaving the EU. Implementation of the CETA is a key step in opening up new markets and opportunities for British businesses and exports, delivering economic growth across the country. This is especially true in respect of the procurement chapter that we have been discussing, which unlocks unprecedented access to India’s federal procurement market.