Government procurement affects almost every public service in India. Government departments purchase medicines, hospital equipment, vehicles, computers, office supplies, security services, transportation, housekeeping, consultancy and thousands of other goods and services.

Traditionally, public procurement was often associated with paperwork, lengthy approval processes, limited supplier participation and a high degree of interaction between buyers, intermediaries and vendors. Different departments also followed different procedures, making procurement fragmented and difficult to monitor.

The Government of India launched the Government e-Marketplace, commonly known as GeM, on 9 August 2016 to create an open and transparent online procurement platform. Procurement of commonly used goods and services through GeM was subsequently made mandatory for Central Government organisations under Rule 149 of the General Financial Rules, 2017.

Almost a decade later, the important question is no longer whether GeM has grown. Its growth is clearly visible. The more important question is:

Has the GeM portal genuinely improved government procurement in India?

The available evidence suggests that it has—but with important qualifications.

What was GeM intended to change?

GeM was created to replace fragmented and largely manual purchasing processes with a unified digital marketplace.

Through the portal, government buyers can search for products and services, compare specifications, obtain bids, conduct reverse auctions, issue contracts and monitor order fulfilment. Sellers can register online, list products or services, participate in tenders and track transactions.

The central idea was to reduce unnecessary human interaction while creating a digital record of the procurement cycle. A purchase made through a structured platform is generally easier to monitor than a purchase handled through paper files, individual quotations and informal communication.

GeM therefore sought to improve three broad areas:

Transparency: Procurement opportunities and transactions should be visible and traceable.

Efficiency: Buyers should be able to purchase more quickly with less paperwork.

Inclusiveness: Smaller businesses should receive direct access to government demand without depending excessively on intermediaries.

The scale of GeM shows that it has become part of mainstream procurement

The strongest evidence of GeM’s institutional impact is its scale.

By April 2026, GeM had recorded a cumulative Gross Merchandise Value of approximately ₹18.4 lakh crore. Procurement during FY 2025–26 alone crossed ₹5 lakh crore. State government procurement on the platform reportedly grew by 38.3% during that financial year.

GeM is no longer limited to stationery, office equipment or small-value purchases. Its service marketplace now includes areas such as security, housekeeping, logistics, consultancy, information technology, energy audits and specialised project-based services.

By December 2025, cumulative procurement of services on GeM had crossed approximately ₹8.18 lakh crore, representing more than 51% of the platform’s cumulative GMV at that time.

This growth matters because it demonstrates that digital public procurement is no longer an experimental or supplementary process. GeM has become a central procurement channel for ministries, departments, public-sector enterprises, state institutions and other eligible organisations.

However, high transaction value alone does not prove that every transaction is efficient. It proves adoption, not necessarily quality. Procurement outcomes must therefore be judged using additional indicators.

How GeM has improved transparency

One of GeM’s most important achievements is the creation of a searchable and traceable procurement environment.

In a traditional procurement process, information may be distributed across physical files, emails, quotations, approval notes and separate departmental systems. GeM brings a substantial part of that activity onto one platform.

Digital bidding provides a record of when a bid was published, which sellers participated, which specifications were used, what prices were offered and how a contract was awarded. This does not automatically prevent wrongdoing, but it makes transactions easier to examine after the event.

GeM also reduces the need for buyers to contact a limited group of familiar local vendors. Eligible sellers from different parts of India can discover opportunities and participate online. This potentially reduces geographical favouritism and expands the pool of suppliers.

In its current system, GeM says it uses artificial intelligence, machine learning and analytical tools to identify abnormal pricing, unusual technical rejections, suspected collusive behaviour and possible buyer–seller collusion. It has also introduced mechanisms such as Bid Health Scores to support procurement monitoring.

These are significant improvements over a purely paper-based process.

Nevertheless, transparency of the platform does not always guarantee fairness in the tender. A buyer can still create highly specific eligibility requirements, narrow technical specifications or additional conditions that favour a particular type of seller. Technology records the decision, but it cannot by itself ensure that the decision was well designed.

Has GeM saved public money?

There is credible evidence that greater competition and price comparison on GeM can reduce procurement prices.

A World Bank assessment cited by the Government reported average savings of approximately 9.75% against the median price between February 2019 and January 2020. In the five categories recording the highest savings, the estimated reduction ranged from 23.48% to 60.52%.

GeM can generate savings through several mechanisms.

A buyer can compare products from multiple sellers rather than relying on a small number of quotations. Competitive bidding encourages suppliers to offer lower prices. Reverse auctions allow qualified sellers to reduce their offers against competing bids. Aggregated demand can also help government organisations negotiate better rates for large quantities.

There is therefore a strong economic argument that GeM has increased price competition.

But savings figures should be interpreted carefully.

The Comptroller and Auditor General’s 2020 audit concluded that GeM’s methodology for indicating savings did not provide a completely accurate picture. The audit also identified cases of abnormally low prices that raised concerns about product authenticity and quality. In one test, products were listed at prices so far below normal market rates that an automatic lowest-price selection could have produced an unrealistic procurement outcome.

This creates an important distinction:

The lowest price is not always the best value.

A product may be inexpensive because it is genuinely competitive. It may also be inferior, incorrectly specified, counterfeit, unavailable in the promised quantity or offered at an unsustainable price merely to win the order.

A complete savings calculation should therefore consider the total procurement cost, including inspection, rejected supplies, delayed delivery, replacement, maintenance, product life and administrative effort. A ₹10,000 item that performs reliably may provide better public value than a ₹7,000 item that fails repeatedly.

GeM has probably saved the government money overall, but a new independent assessment using recent transaction data would provide stronger evidence than relying mainly on older savings studies and headline GMV figures.

GeM has significantly widened MSME participation

GeM’s contribution to supplier inclusion is one of its strongest achievements.

During FY 2025–26, Micro and Small Enterprises reportedly executed 68% of the orders placed on GeM and accounted for 47.1% of total GMV. More than 11 lakh MSEs were registered on the platform, and they received more than 51 lakh orders worth approximately ₹2.36 lakh crore during the year.

This represents an important change in market access.

A small manufacturer located outside a major metropolitan area can, in principle, register on GeM and sell directly to government organisations across India. The business no longer needs a physical office near every purchasing department or access to a network of procurement intermediaries.

GeM has also created programmes for women entrepreneurs, startups, artisans, self-help groups and enterprises owned by members of historically disadvantaged communities.

As of January 2026, more than two lakh women-led MSEs were registered on GeM. These enterprises had cumulatively secured orders exceeding ₹80,000 crore, representing approximately 4.7% of GeM’s total order value at that time.

This does not mean that all small businesses find GeM easy to use. Digital literacy, product listing requirements, compliance documentation, bid security, technical certificates and working-capital requirements can still create barriers.

A small business may win an order but then struggle to finance production, arrange nationwide delivery or wait for payment. Therefore, registration numbers should not be treated as the only indicator of inclusion. Repeat orders, payment time, seller survival and the distribution of order value among micro, small and large suppliers are equally important.

Even with these limitations, GeM has unquestionably opened government procurement to a wider supplier base than the older system generally allowed.

GeM has made procurement faster and more standardised

Digital catalogues, standard bid templates, online comparisons and automated workflows can reduce the administrative time required for routine purchases.

Government buyers no longer have to repeat every procedural step manually for common items. Standard product categories and service-level requirements help departments describe their needs more consistently.

The National e-Governance Division’s 2026 GeM case study describes how electronic bidding, reverse auctions, automated comparisons, dashboards and vendor-rating mechanisms have helped standardise procurement across government organisations.

This standardisation is particularly useful for frequently purchased goods and clearly definable services.

However, complex procurement cannot always be reduced to catalogue selection and lowest-price comparison. Medical equipment, specialised software, consultancy, long-term maintenance and technical services may require a deeper assessment of performance, experience, compatibility, life-cycle cost and service capability.

GeM works best when the requirement can be clearly defined. When specifications are incomplete or poorly prepared, digitisation may simply accelerate a badly designed purchase.

Has GeM eliminated corruption and collusion?

No digital procurement platform can honestly claim to eliminate corruption entirely.

GeM reduces some traditional risks by limiting direct interaction, publishing opportunities and creating electronic records. But manipulation can move from the physical process to the design of the digital tender.

Possible risks include:

  • Tailor-made technical specifications
  • Unnecessarily high turnover or experience requirements
  • Coordinated bidding by connected sellers
  • Supporting bids submitted only to create the appearance of competition
  • Unjustified rejection of technically eligible bidders
  • Buyer–seller communication outside the platform
  • Deliberately low bids followed by non-delivery or attempts to alter contract conditions

The Competition Commission of India has dealt with allegations and findings involving collusive bidding in tenders conducted through GeM. In a January 2026 decision concerning a GeM procurement tender, the Commission found that participating companies had entered into an arrangement resulting in collusive bidding.

This does not show that GeM has failed. It shows that electronic procurement still requires competition enforcement.

Indeed, GeM’s increasing use of anomaly detection and analytics appears to recognise this reality. The platform should not be assessed by whether misconduct ever occurs, but by whether suspicious conduct is detected quickly, investigated independently and punished effectively.

Delayed payment remains a serious weakness

A procurement process is not complete when an order is awarded. It is complete when the correct goods or services are delivered, accepted and paid for.

The CAG’s 2020 audit identified serious payment delays in GeM’s earlier years. It found that many payments were either delayed or not correctly updated on the platform, even after Consignee Receipt and Acceptance Certificates had been generated. The audit described delayed payment as a systemic issue capable of undermining the platform’s objectives.

GeM has since introduced payment-related integrations, monitoring mechanisms and procedural changes. Nevertheless, delayed payment remains a major challenge across India’s MSME ecosystem.

In 2026, a Parliamentary Standing Committee described delayed payment as one of the most critical problems affecting MSMEs. It specifically recommended stronger integration between GeM and the Samadhaan and Online Dispute Resolution systems so that delayed payments could be automatically flagged and subjected to time-bound enforcement.

This distinction is important. GeM can generate a digital invoice and display its status, but the platform cannot by itself guarantee that a buyer promptly inspects the goods, generates acceptance documentation and releases funds.

For small suppliers, delayed payments can cancel out the benefit of winning a government order. They must pay for raw materials, salaries, GST, packaging and transportation before receiving payment. Long delays convert a valuable order into a working-capital burden.

Timely payment should therefore be treated as one of GeM’s most important outcome indicators.

What did the CAG audit reveal?

The CAG’s 2020 information-systems audit is the most important critical examination of GeM’s early development.

The audit accepted that GeM had successfully implemented an online procurement solution. However, it also identified deficiencies in seller and buyer registration, credential verification, incident management, system controls, price reasonableness and payment processing.

It found that many incidents took longer than the prescribed period to resolve. Some cases remained open for several months, weakening the deterrent effect of the complaint system.

The audit also questioned whether the early platform had undergone all the required technical certification and testing necessary to provide full assurance regarding the integrity of electronic bidding. It recommended stronger audits, improved seller verification, anomaly detection, data cleansing and stricter monitoring of delayed payments.

These findings must be viewed in context. The audit examined GeM during its relatively early years, and management stated that several corrections and new controls were being implemented.

Current GeM systems are substantially larger and more sophisticated than the platform examined in that audit. The introduction of machine-learning-based catalogue validation, anomaly detection, collusion indicators and real-time monitoring suggests that some of the audit recommendations have influenced later development.

However, public confidence would be strengthened by another comprehensive and independent systems audit covering the modern GeM platform.

A balanced scorecard

Transparency: Significantly improved

GeM creates electronic records, publishes opportunities and reduces dependence on private communication between buyers and selected vendors.

Competition: Improved, but uneven

The platform gives more sellers access to government demand. However, restrictive specifications and collusive bids can still weaken genuine competition.

Procurement speed: Generally improved

Routine purchases can be completed faster through catalogues, online bidding and standard workflows. Complex procurements may still face delays in technical evaluation, inspection and approval.

Cost savings: Probably substantial, but measurement needs updating

Competitive bidding and reverse auctions can lower prices. Independent evidence has shown savings, but recent savings claims should be assessed using a transparent and consistent methodology.

MSME inclusion: Strongly improved

GeM has opened government markets to a large number of MSEs, startups and women-led enterprises. Financial capacity, compliance and delayed payment remain barriers.

Product and service quality: Mixed

Digital specifications and seller assessment can improve quality control. Excessive dependence on the lowest bid can create quality and delivery risks.

Accountability: Improved, but enforcement remains essential

Digital records make scrutiny easier. Complaints, penalties, payment enforcement and action against collusion must still be handled effectively.

What should GeM improve next?

GeM’s next phase should focus less on transaction volume and more on measurable procurement outcomes.

First, the government should publish an independently verified annual savings report. It should compare GeM prices with suitable market benchmarks while accounting for quantity, taxes, freight, warranty, installation, maintenance and product quality.

Second, delayed payments should be automatically escalated. Buyers repeatedly delaying acceptance certificates or payments should be visible on departmental dashboards, and statutory interest should be applied wherever legally required.

Third, procurement should gradually move from a narrow L1 or lowest-price approach towards value-based evaluation wherever appropriate. Product life, warranty, service support, energy consumption, maintenance cost and past performance should form part of the decision for technically complex purchases.

Fourth, GeM should publish more outcome-oriented data, including the percentage of single-bid tenders, average number of qualified bidders, technical rejection rates, contract cancellation rates, delivery delays, complaint-resolution time and median payment time.

Fifth, seller verification should remain continuous rather than being treated as a one-time registration exercise. Product authenticity, OEM authorisation, manufacturing capability, past delivery performance and connected-party bidding require ongoing monitoring.

Finally, government buyers need regular procurement training. No technology platform can compensate for unclear specifications, unrealistic delivery schedules or poorly designed eligibility conditions.

Final Opinion: Has GeM improved government procurement in India?

Yes, GeM has substantially improved the government procurement process in India.

It has created a common digital marketplace, expanded competition, reduced paperwork, increased transaction visibility and opened government purchasing to a much larger number of MSMEs, startups and women-led enterprises.

Its rapid growth—from a new procurement experiment in 2016 to a platform handling cumulative transactions worth ₹18.4 lakh crore by April 2026—shows that digital procurement has become institutionalised across government.

However, GeM should not be described as a complete solution to every public-procurement problem.

It has improved the infrastructure of procurement, but outcomes still depend on the people and institutions using that infrastructure. Poor tender specifications, lowest-price obsession, delayed acceptance, delayed payment, collusion and inadequate contract management can still produce poor results.

The fairest conclusion is:

GeM has made Indian government procurement more transparent, competitive, inclusive and efficient, but it has not made the process automatically fair, corruption-free or outcome-oriented.

The portal’s first decade was primarily about digitising and expanding public procurement. Its next decade should focus on quality, timely payment, stronger competition, independent measurement and value for public money.