The Indian Government’s E-commerce Procurement Platform Has Already Helped It Save Rs. 7500 Crore

The e-commerce revolution has changed the lives of millions of Indians, but it turns out it’s transformed how the government buys things as well.

The Government e-Marketplace, or GeM, has saved the Indian government $1 billion, Bloomberg reports. The portal, which is referred to as the government’s, helps ministries and state companies connect with sellers across the country to buy computers, cars, chairs and millions of other products and services at the lowest possible price. The sellers include some of the India’s biggest companies, such as Hindustan Unilever., Maruti Suzuki and Tata Motors. The government is the biggest buyer in India by far — its annual procurement bill is $400 billion — and by transitioning a part of its procurement to the e-marketplace, it has already saved it $1 billion.

government e marketplace

“Every penny saved is a penny added to the topline. It’s an addition to the government’s kitty,” Talleen Kumar, GeM’s chief executive officer, told Bloomberg. “If GeM is able to bring about savings in procurement, that money can be utilized by the government for other important purposes and priorities.”

 The GeM was formed in 2016 under an initiative led by PM Modi. Until then, all Indian government procurement was routed through the Directorate General of Supplies and Disposals, which had its origins in the India Stores Department the British set up in 1860 to centralize goods buying. GeM, however, allows sellers to transparently list their products, and helps the government buy products at the lowest possible price. There are 46,000 buyers on the platform, which include government ministries and bodies, and over 5 lakh sellers. There are 16 lakh products on the marketplace, and the government has already placed 46 lakh orders through the platform. $3.5 billion worth of goods have been transacted, which is only a small fraction of the $400 expenditure bill of the government, suggesting that there’s plenty of headroom for the platform to grow.

This mirrors what e-commerce has done for Indian consumers. Earlier, consumers would only buy from shops nearest to them, but e-commerce websites now let them compare prices across platforms and look for the best bargains. The Government e Marketplace provides the government with the same ability, and the $1 billion saved shows that it’s already yielding some impressive results. While India’s consumer e-commerce revolution was brought about by foreign companies like Amazon and venture-backed dollars, the Indian government has gone on to show that it’s no mug at the e-commerce game either.