Policy Update
Bavleen
Background
The Government e‑Marketplace (GeM) portal is India’s flagship digital platform for government procurement of goods and services, launched on 9 August 2016 by the Ministry of Commerce & Industry (MoCI) to drive greater efficiency, transparency, and inclusiveness in public procurement.
Before GeM, government procurement largely depended on manual, fragmented, and opaque processes. The objectives of GeM encompass three key pillars: (i) Efficiency – reducing time, cost, and manual intervention, (ii) Transparency – open-access catalog, audit trails, analytics, and (iii) Inclusiveness – enabling Micro & Small Enterprises (MSEs), startups, women-led enterprises, and Self-Help Groups (SHGs) to access government demand.
Beneficiaries of GeM include:
- Government departments (central ministries, state agencies), PSUs, and local bodies as buyers
- Sellers and service-providers (MSEs, women-owned firms, startups) as suppliers
- Citizens indirectly, through better value for public spending, and increased participation of small businesses
Over the past years, the platform has expanded significantly in reach, registration, value of transactions, and product/service categories. For example, as of early 2025, data show over 22 lakh sellers/service providers registered and a cumulative Gross Merchandise Value (GMV) exceeding ₹5 lakh crore.
Functioning
GeM functions as a unified digital marketplace for procurement where government buyers log in, list their requirements, select from the catalog, or invite bids, and then place orders. Suppliers register on the portal, upload goods/services, meet eligibility norms, and can participate via direct purchase, e-bidding, or reverse auctions.
The typical workflow is: buyer registration → requirement posting (via catalog or bid) → supplier registration/onboarding → order placement/tracking → payment/fulfillment → feedback/analytics. The portal also provides dashboards for monitoring order volume, value, supplier performance, and quality reports.
In terms of institutional mechanisms, the MoCI oversees the policy, while a special-purpose vehicle (SPV) handles operations. States and PSUs interface with the portal for their procurement. The portal integrates analytics, cataloging standards, performance measurement, and seller inclusion mechanisms (such as preferential treatment for MSEs, women, and startups).
From the literature and policy reviews:
- GeM has been lauded for standardizing procurement procedures, bringing in new suppliers, and digitizing processes.
- But challenges remain: supplier onboarding complexity (especially for smaller firms), quality assurance for diverse categories (goods vs services), integration with state procurement systems, and monitoring post-contract fulfillment.
- GeM’s own “quality reports” show delivery timeliness and user ratings, but independent evaluation remains limited.
Thus, while the functioning framework is well-articulated, operational realities reveal gaps in uniform uptake, capacity at the state/field level, and seamless supplier interface.
Performance
Key figures:
- According to a PIB release dated 17 March 2025, GeM crossed ₹5 lakh crore GMV (Gross Merchandise Value) more than 18 days before the end of FY 2024-25, over 22 lakh sellers/service-providers registered by 13 February 2025.
- As of 2 March 2025, statistics indicate 162,985 primary buyers, 2,28,754 secondary buyers, 11,006 product categories, and 332 service categories. The order volume in the last financial year was 62,86,543 with a value of ₹4,03,305 crore; for the current year (till 28 Feb 2025), 61,23,691 orders were valued at ₹4,52,594 crore.
- The services segment has grown strongly: in the April-Jan period of FY 2024-25, the goods segment was ₹1.55 lakh crore, services ₹2.54 lakh crore.
Detailed insights:
- Services are now the larger share of procurement by value, suggesting shifting demand from traditional goods to digital/consulting/logistics services.
- The GeM Platforms are increasingly enabling MSE participation: for example, 37.87 % of total order value came from MSEs in the data sample cited in one release.
- State-wise adoption varies: e.g., one news article reports that the state of Uttar Pradesh recorded purchases worth ₹65,227 crore via GeM between 2020-21 and 2024-25, placing it among the largest state users.
Interpretation:
The data points to a strong upward trajectory: increasing total value, expanded seller base, and deeper category coverage. The growth from ~₹4 lakh crore to ~₹5 lakh crore GMV within less than 50 days underscores momentum. The shift to services also reflects responsiveness to evolving procurement needs.
However, data constraints exist: publicly released figures do not always provide full state-wise breakdowns, time series longer than 3 years are less accessible, and many outcomes (cost savings, quality improvement) are not systematically documented.
Impact
Transparency and Efficiency:
By moving procurement online, the GeM platform has reduced manual transaction stages, allowed real-time tracking, provided dashboards, and thereby improved decision-making and auditability. The World Bank, in its blog, estimated median price savings of ~9.75 % via GeM compared to legacy processes.
Inclusiveness and Access:
GeM has actively opened procurement opportunities to previously under-represented sellers: women entrepreneurs (e.g., over 1,77,786 Udyam-verified women micro/SMEs with order value ~₹46,615 crore as of Feb 2025); startups (over 29,000 onboarded); MSEs (large share of order value). These developments align with government policy on “Make in India” and inclusive growth.
Changing Procurement Culture:
Public bodies increasingly adopt the portal, which changes procurement behavior: buyers increasingly rely on catalogs and analytics rather than offline ad-hoc purchases. The increasing value and order volume reflect systemic adoption.
Economic & Market Effects:
With government demand channeled via the portal, small firms get direct access to large, stable buyers; competition is enhanced; value for money potentially improved; and the digital backbone strengthens the procurement ecosystem. One government release claims over ₹1.15 lakh crore in public savings.
Limitations of Impact:
While input/output metrics (GMV, seller registrations, buyer numbers) are strong, independent measures of downstream outcomes (cost savings across all categories, seller growth trajectories, quality outcomes, regional equity) are limited. Some exceptions: the Delhi government’s recent decision to ban cart-based purchases for hospitals via GeM indicates oversight concerns.
Together, these impacts suggest that GeM is reshaping procurement culture in both scale and ethos, though empirical verification of cost savings remains partial.
Emerging Issues & Suggestions
Emerging Issues:
- Inconsistent adoption: Some buyers and states are slower to integrate.
- Supplier-side onboarding friction, especially for small/rural enterprises: documentation, digital interface, compliance.
- Quality assurance and service procurement remain more challenging than goods procurement.
- Data transparency and disaggregated state-wise or category-wise metrics remain thin.
- Overemphasis on volume (GMV) rather than outcomes (cost savings, service quality).
- Emerging regulatory issues: e.g., health-sector buyers being restricted from direct GeM procurement due to concerns of inflated pricing.
Suggestions:
- Provide state-wise adoption targets and performance dashboards to monitor uptake and equity.
- Simplify digital onboarding and compliance for MSEs, women-led firms, and rural enterprises.
- Ensure continuous monitoring of service procurement (versus goods) with qualitative metrics.
- Mandate publication of outcome metrics (cost savings, supplier performance) in public dashboards.
- Roll out capacity-building at state/district levels to integrate GeM into their procurement workflows.
- Institutionalize feedback loops: supplier and buyer satisfaction, quality issues, grievances.
- Explore sector-specific enhancements: for sectors like healthcare, customized modules to handle complex procurement cases.
Way Forward
In an era of digital governance, GeM stands at the intersection of procurement reform, inclusive economic participation, and transparency. The task ahead is to convert the strong input and growth metrics into sustained structural change. The next phase should emphasize deepening penetration, improving quality, embedding analytics, and ensuring equity.
GeM should extend beyond central-state procurement to local bodies (districts, municipalities), link with supply-chain ecosystems of MSMEs and artisans, integrate green procurement and sustainability criteria, and facilitate global tendering as envisaged under trade agreements. The evolution from a high-volume transactional platform to a strategic procurement ecosystem is key.
If GeM continues on this trajectory—coupled with rigorous evaluation and adaptive reforms—it can contribute significantly to strengthening India’s public procurement architecture, expanding market access for small businesses, and reinforcing the vision of a digitally enabled “New India” where government procurement is efficient, transparent, and inclusive.
References
- Invest India. (2023, February 28). GeM: The treasure trove for SMEs in procurement town. https://www.investindia.gov.in/team-india-blogs/gem-treasure-trove-smes-procurement-town
- Press Information Bureau, Government of India. (2025, March 17). Government e-Marketplace surpasses ₹5 lakh crore GMV before FY 2024-25 year-end. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2111862
- Press Information Bureau, Government of India. (2025, March 2). The strategic impact of Government e-Marketplace (GeM) on India’s economy. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2107510
- Government e-Marketplace. (n.d.). Statistics. https://gem.gov.in/statistics
- World Bank. (2022). India’s Government e-Marketplace: Technology for sustainable development. https://blogs.worldbank.org/en/governance/indias-government-e-marketplace-technology-sustainable-development
About the Contributor
Bavleen, Research Intern at IMPRI, pursuing Economics Honors from Sri Guru Gobind Singh College of Commerce, Delhi University.
Acknowledgment: The author sincerely thanks Ms. Aasthaba Jadeja and the IMPRI team for their valuable support.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
Read More at IMPRI:
eGOVMMCASES (2024) – Multimedia Case Studies on e-Governance in India
Nagar Van Yojana (2025); Ministry of Environment, Forest & Climate Change
