GeM Reduces Transaction Charges to 0.30%, Raises MSE Exemption Limit to ₹10 Lakh

The Government e Marketplace has reduced transaction fees, increased exemptions for smaller orders and capped high-value order charges to make government procurement more affordable for Micro and Small Enterprises.

GeM Reduces Transaction Charges to 0.30%, Raises MSE Exemption Limit to ₹10 Lakh

The Government e Marketplace (GeM) has introduced a series of changes to reduce the financial burden on businesses participating in public procurement, particularly Micro and Small Enterprises (MSEs). Under the revised fee structure, transaction charges have been lowered, the exemption limit has been increased, and a new cap has been introduced for high-value orders.

The measures aim to make government procurement more affordable, encourage wider participation from smaller businesses and improve access to government contracts.

GeM Revises Transaction Fee Structure

GeM has reduced its transaction charges from 0.50% to 0.30% of the total order value. The threshold for exemption from these charges has also increased from ₹5 lakh to ₹10 lakh, allowing more smaller orders to be placed without additional transaction costs.

For orders exceeding ₹10 crore, the platform has set a maximum transaction charge of ₹3 lakh. Previously, the upper limit stood at ₹72.50 lakh.

These changes are expected to lower procurement-related expenses for sellers and make the platform more accessible to businesses of different sizes.

According to a press release from the Ministry of Commerce and Industry, the reforms were highlighted at an event organised by GeM in partnership with Laghu Udyog Bharati (LUB) under the GeM Samvad 2026 initiative.

Additional Measures to Support Small Businesses

GeM has implemented other measures to reduce the cost of joining and operating on the platform. Nearly 97% of orders placed through the marketplace attract no transaction charges.

The platform also discontinued the requirement for sellers to deposit Caution Money during onboarding in July 2025. Additionally, vendor assessment fees applicable to Original Equipment Manufacturers (OEMs) have been reduced since January 2024.

Together, these steps are intended to simplify participation, reduce upfront expenses and encourage more enterprises to explore government procurement opportunities.

GeM–LUB Partnership Strengthens MSME Outreach

GeM and Laghu Udyog Bharati formalised their partnership through a Memorandum of Understanding in 2024. Since then, the collaboration has organised 108 virtual conferences alongside numerous in-person events across India.

The initiative focuses on increasing awareness of GeM, assisting businesses with digital registration and helping Micro, Small and Medium Enterprises (MSMEs) understand how to use the platform to access government buyers.

Speaking at the event, GeM Chief Executive Officer Mihir Kumar said the platform's reforms had helped MSMEs by lowering participation costs, simplifying procedures and improving access to financing.

He noted that these initiatives could help smaller businesses participate more confidently in public procurement and support the broader national objectives of Atmanirbhar Bharat and Viksit Bharat 2047.

Kumar also emphasised GeM's aim of developing a trusted seller ecosystem where business opportunities are accessible through a transparent and digital marketplace.

GeM Integrates with Five TReDS Exchanges

Access to working capital and delays in receiving payments remain important challenges for many MSMEs. To address these concerns, GeM has strengthened its links with financing mechanisms available to businesses.

GeM Additional CEO Ajit B. Chavan said the platform had integrated with all five Trade Receivables Discounting System (TReDS) exchanges, in line with the Union Budget 2026–27 announcement.

TReDS platforms enable eligible businesses to obtain financing against their trade receivables. This can help suppliers manage cash-flow requirements while waiting for payments from buyers.

GeM SAHAY also offers collateral-free lending against purchase orders placed on GeM. The integration with TReDS exchanges, together with this lending facility, is expected to improve financing options for MSMEs and help them manage working capital requirements.

LUB to Expand Support for GeM Sellers

The GeM Samvad 2026 event brought together representatives from GeM, LUB and participating MSMEs. Those involved in the discussions included LUB President Madhusudan Dadu, National General Secretary Om Prakash Gupta, National Treasurer and GeM Nodal Janak Bhatia, and GeM Additional CEO Ajit B. Chavan.

Dadu and Gupta outlined plans to strengthen cooperation with GeM and expand support for small businesses through LUB's nationwide network.

The proposed measures include regular weekly GeM–LUB virtual conferences and dedicated assistance counters at selected offices. These counters are expected to be staffed by trained volunteers who can help businesses navigate the platform.

Reforms Aim to Widen Participation in Public Procurement

By lowering transaction charges, raising the exemption threshold and improving access to financing, GeM is seeking to make government procurement more accessible to smaller enterprises.

The continued partnership with LUB is also expected to strengthen awareness and provide practical assistance to businesses across India. These efforts could help more MSMEs participate in digital procurement, pursue government contracts and contribute to India's long-term economic development goals.