New Delhi: In a move to simplify business processes and promote inclusivity in the economy, the Government e-Marketplace (GeM) has significantly lowered transaction charges for sellers and service providers using its platform.

As per the Ministry of Commerce and Industry, the new policy introduces zero transaction fees for all orders up to Rs 10 lakh, a substantial increase from the previous threshold of Rs 5 lakh.

For orders ranging between Rs 10 lakh and Rs 10 crore, the transaction fee has been reduced to 0.30% of the total order value, down from the previous rate of 0.45%. For orders exceeding Rs 10 crore, a flat fee of Rs 3 lakh will be applied, which is a major cut from the earlier cap of Rs 72.5 lakh.

These changes mean that about 97% of all transactions on GeM will now be exempt from transaction charges. For the remaining transactions, a minimal fee of 0.30% will apply to orders above Rs 10 lakh, with a maximum charge of Rs 3 lakh, regardless of the order size.

This reduction in transaction fees, ranging from 33% to 96%, is set to improve the competitiveness of sellers and service providers significantly. It is expected to open up the public procurement system, offering particular benefits to Micro and Small Enterprises (MSEs), which have historically encountered financial and operational challenges.

By lowering transaction costs, GeM is creating an equal playing field, allowing small businesses to participate more actively in public procurement processes. This policy shift also aligns with the government's broader goal of lowering transaction costs and promoting a more competitive marketplace.

The reduction in fees follows feedback from the business community and highlights GeM's ongoing commitment to driving innovation and efficiency within the procurement ecosystem.

The financial year 2024-25 marks a key milestone for GeM, especially in the services sector, which has experienced significant growth. As of August 31, 2024, services accounted for 65% of the platform’s total Gross Merchandise Value (GMV), reaching Rs 1.39 lakh crore and surpassing product GMV for the first time. The total GMV for this period stood at Rs 2.15 lakh crore.

This growth in services procurement is supported by an extensive inventory of over 325 service categories available on GeM. The platform’s user-friendly interface and transparent e-bidding system have made it easier for government buyers to assess and engage with service providers.

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