How GeM is Transforming Public Procurement with Technology and Inclusion In 2024, it has grown to become one of the largest Business-to-government (B2G) procurement portals

Government eMarketplace (GeM) was established in 2016 with a modest gross merchandise value (GMV) of INR 422 crore. In 2024, it has grown to become one of the largest Business-to-government (B2G) procurement portals, transforming how the Indian government procures goods and services. In just eight years, it has expanded to a remarkable four lakh crore cumulatively, equivalent to USD 50 billion.

GeM's primary mandate is to streamline procurement for all tiers of the Indian government—central, state, and local bodies. With a focus on innovation, entrepreneurship, and inclusion, the platform has become a crucial link between industry and government, empowering micro, small, and medium enterprises (MSMEs). Additionally, the portal uses natural language processing (NLP) and data analytics to provide insights into price trends and ensure that procurement decisions are data-driven.

Talking about the portal's exponential growth at Entrepreneur Summit 2024, Ajit B. Chavan, Additional CEO, GeM emphasized, "This year, we are poised to hit INR 6 to 7 lakh crore. Probably, we would be second and who knows we would be first largest in the world this year or next year. We deal with goods and services, so anything and everything that the government of India or the state government or the third tier of government, the Panchayat Raj, anything they need to buy, they would be buying on the platform."

Democratizing Public Procurement

Chavan highlighted that one of the platform's most significant achievements is its role in democratizing public procurement. "GeM has enabled micro and small enterprises (MSEs) from every corner of the country to participate in large government orders," Chavan added. The platform is now home to more than 90 lakh registered sellers, of which 2.85 lakh are actively transacting. Notably, 39 per cent of the business value on GeM is transacted by MSEs.

Boosting Efficiency and Transparency

While talking about the portal's efficiency and transparency, Chavan said, "What used to be a 42-day procurement cycle has now come down to just 7 to 10 days." The platform has introduced various modes of procurement, such as direct purchase for orders below INR 50,000 and L1 (lowest price) procurement for orders up to INR 10 lakh.

"The closest to a B2C is a direct purchase, so there are sellers who have uploaded their SKUs or we call them offerings, if they have uploaded there and the value of which is less than 50,000, any government buyer can just go there and buy it, no questions asked. Then the next mode of procurement is an L1 mode of procurement, where up to the value of 10 lacks, you know, the government buyer can compare three products from three OEMs, that is the original equipment manufacturer, and can buy it, only thing is the buying decision is a little anonymized in the sense that buyer would not know who is the seller," Chavan explained.

Since the integration of Aadhaar and PAN in its portal, it has eliminated redundancies and streamlined the registration process for sellers. This robust digital infrastructure has also helped reduce public procurement costs. A World Bank study revealed that GeM has saved the government 10 per cent of the GMV, amounting to nearly one lakh crore Indian rupees.

Empowering Start-ups, Innovators and MSMEs

In a move to foster innovation and entrepreneurship in the country, GeM has on-boarded 27,000 startups, contributing INR 25,000 crore in business. "This year, we are aiming to onboard a majority of the 1.25 lakh DPIIT-registered startups onto the platform," Chavan stated, urging startups to seize this unique opportunity to engage with government buyers.

Also, recognizing the capital challenges faced by MSMEs, GeM launched the GEM Sahay initiative for collateral-free digital lending–aiming to resolve the working capital needs of small enterprises and boost their ability to compete in the public procurement space. "We've moved from cash flow-based lending to collateral-based digital lending. MSMEs can now avail loans of up to INR 10 lakh within 10 minutes, at interest rates under 10 per cent," Chavan highlighted.

The portal is available in twelve different Indian languages that increases its accessibility. Chavan concluded with remarks, "We have gone out of the way consciously to ensure that Make in India happens in this country and this is one good platform where all of this is happening."