As we move towards our goal of becoming a green society, there will be significant changes to how we purchase products through the Government e-Marketplace (GeM) in India. Green procurement has transitioned from an option to being the norm for determining which suppliers receive contracts, with the inclusion of sustainability criteria and certifications becoming increasingly commonplace. The Government of India has committed to achieving net-zero emissions by 2070. The Union Budget has set aside a significant portion of its planned Rs. 11 lakh crores of capital expenditure towards green infrastructure and sustainability. By 2030, it is estimated that greater than 50% of Central Government tenders will require compliance with sustainability criteria.
Historically, GeM has positioned itself as the place to buy sustainable products through the establishment and growth of its dedicated green categories, eco-labeling filters, partnership agreements with the United Nations Environment Programme (UNEP) and the Energy and Resources Institute (TERI), and many other examples of new service offerings under Green Transition Services. The opportunities available to sellers as a result of green procurement represent both significant challenges and new opportunities. Sellers that invest in environmental certification, develop eco-safe products, and comprehend lifecycle costing will capture increased interest from government buyers who are increasingly being mandated to consider sustainability when making procurement decisions. Those sellers that do not invest in these areas will be unable to compete in the green procurement space as sustainability criteria migrate from optional preference to mandatory requirement.
Understanding GeM's Green Procurement Framework
Through various methods that work together, GeM's approach to sustainability makes it easier for government buyers to purchase green products and allows sellers that are environmentally responsible to sell their products to government agencies.
Collaborating with prominent environmental organizations, GeM has developed specific categories of green products on its platform. Through collaboration with organizations such as UNEP and TERI, GeM provides buyers with customized filters in the marketplace to assist them in finding energy-efficient equipment, waste management solutions, solar-powered products, recycled-content products, and sustainable building materials. These filters are not merely labels; they are categories developed with precise criteria that describe a given product's environmental performance.
The Green Gold Collection is a showcase of bamboo products as sustainable alternatives for use in the construction of buildings and the decoration of homes and businesses. Since bamboo is a renewable resource that has a lower carbon footprint than traditional building materials, the Green Gold Collection will provide large volumes of construction materials that are used by the government, as well as promote the sustainability of forest practices.
The renewable energy market filters have been developed to help buyers locate solar inverters, solar street lighting, solar water heating systems, battery-powered e-rickshaws, and other clean energy products. Through the use of these filters in the search process, buyers will be given the opportunity to find clean energy products as government departments work towards their renewable energy goals.
Since its inception in 1991, the Eco-mark certification program has gone through a resurgence in recent years and provides recognized evidence of sustainability for various products. Currently, in excess of 90% of all writing and printing paper sourced on GeM is sourced from Eco-mark certified suppliers who manufacture via agro-based and recycled fibers instead of using virgin pulp. Therefore, once integrated into the GeM platform, the Eco-mark certification could lead to real changes in the way people behave when buying.
Forward auctions are an example of how to promote a circular economy because they create opportunities for government agencies to auction fully depreciated or obsolete items rather than throwing them into the rubbish bin. The Buyback option is currently available for over 37 different product categories. This option allows a seller to provide pricing for new products and to quote a buyback price for each older version. By utilizing these options, government agencies encourage lifecycle management of equipment and help to reduce the amount of electronics that are sent to landfills.
Green Transition Services is a newly offered feature on the GeM platform that outlines a framework for government agencies that are looking to achieve net-zero operations and carbon neutrality. In addition to providing a framework for government buyers, Green Transition Services provides GHG emission inventories, methods for GHG accounting, carbon footprints, and roadmaps to meet their emission reduction goals to service providers who have the ability to provide environmental consulting services.
Essential Green Certifications: What Sellers Need to Win Contracts
To succeed in winning green tenders via GeM, vendors must hold valid certifications from a recognized body as proof of their sustainability statements. The governing bodies using the GeM platform will not accept a vendor’s word; they require third-party documented evidence via recognized certification bodies.
The Eco-mark certification issued by the Central Pollution Control Board is the main national ecolabel in India. It allows products to receive an Eco-mark by meeting certain environmental criteria for various types of products, i.e., soap, food, architectural coatings, electronic goods, and textiles, amongst others. After recent updates to the Eco-mark rules, scheduled for implementation by 2025, the application procedure has been simplified, while the environmental criteria have been enhanced. This has enabled Micro, Small, and Medium Enterprises (MSMEs) to obtain Eco-mark certification more easily, while providing greater assurances of credibility to purchasers.
Criteria for obtaining Eco-mark certification differ according to product category; however, generally speaking, they evaluate the following: sourcing of raw materials, production methods, amount of energy used during production, GHG emission or effluent generated during production, lifecycle impact of the product, and how the product will be disposed of at its end of life. In the case of paper products, for example, the certifications require a percentage of recycled content, limitations on the use of chemicals for pulping, and restrictions on the use of bleach during the pulping process.
The Bureau of Energy Efficiency has implemented a rating for equipment and appliances that consume energy referred to as a BEE star rating. BEE labeling was used on various items such as air conditioners, refrigerators, fans, pumps, motors, transformers, and LED lamps, which represent the efficiency of the items from one (1) to five (5) star levels. A higher number of stars indicates a more energy-efficient product with lower costs to operate during the item's life cycle.
In some cases, green tenders require the use of energy-efficient products, and the BEE star rating becomes part of the technical specifications for bidding along with award points to bidders that provide products that are rated higher on the BEE star rating system. Thus, vendors who provide a five-star-rated product have a significant advantage over a vendor who provides a product that is rated three or does not have a rating.
ISO 14001 Environmental Management System Certification shows that an organization has a systematic approach to managing and addressing its environmental impact. ISO 14001 specifies how to establish environmental policy, identify environmental impacts and aspects, comply with applicable legal regulations and requirements, set objectives for improvement, implement operational controls, and conduct audits with regular management reviews.
ISO 14001 represents an organization's commitment to improving its environmental performance; while it does not focus on a product itself, it serves as a substantial competitive differentiator for those service providers and manufacturers bidding on large contracts with prospective buyers assessing vendor sustainability practices alongside product specifications for this reason. Companies holding ISO 14001 certification may have an increased chance of winning contracts compared to those that do not hold certification.
Green product certifications such as IGBC (Indian Green Building Council) and GRIHA (Green Rating for Integrated Habitat Assessment) have typically applied to construction materials. However, as the implementation of green building codes becomes mandatory by the Government of India's Smart Cities Mission and other similar government-funded programs, there is an increasing demand for certified green building materials—low-VOC paints, recycled concrete, energy-efficient windows, sustainably produced timber products, and water-efficient plumbing fixtures—from suppliers offering approved green materials.
As infrastructure procurement continues to evolve, the requirement to submit carbon footprint declarations and Environmental Product Declarations (EPDs) is becoming more common among tenders. Increasingly, buyers are requesting lifecycle carbon footprint information for construction materials when evaluating potential purchases and utilizing embodied carbon instead of initial price as a basis for comparison. Therefore, developing EPDs using accredited EPD development programs will enable you to be positioned to bid using lifecycle costing approaches when submitting proposals on future projects where lifecycle costing methodologies will be used to award bids.
Key Green Product Categories with Growing Demand
Certain product categories on GeM are experiencing explosive growth in green procurement requirements, creating immediate opportunities for environmentally conscious sellers.
The government agencies have prioritized renewable energy equipment, such as solar panels, solar inverters, solar charge controllers, battery storage systems, wind energy equipment, and hybrid renewable systems, in their efforts to achieve renewable energy targets. The Indian Railways' commitment to achieving net-zero emissions by 2030 has resulted in substantial demand for renewable energy installations at thousands of railway stations and facilities.
There is a concerted effort on the part of the Ministry of Road Transport, the Ministry of Defence, and numerous state departments to electrify their respective fleets, and this is evident in the success of EVs (electric vehicles), curbside charging stations, electric buses operated on a contract basis, electric cars for government officials, e-rickshaws used for last-mile delivery, and public charging stations being included in frequent tenders posted on the GeM platform, with all EVs (electric vehicles) given preferential treatment when being purchased from domestic manufacturers.
There are many opportunities for procuring energy-efficient lighting and HVAC systems for government buildings in order to assist in reducing their operational expenses. Lighting systems using LED technology and energy-efficient A/C equipment rated at the highest 5-star BEE energy efficiency level, VRV/VRF HVAC equipment, and smart lighting controls are being included to be analyzed in life cycle cost (LLCA) analysis. When taking into account both the purchase price and estimated costs of operation over the expected average lifespan of 10-15 years, the above-mentioned equipment types will receive an overwhelming preference for government procurements.
Waste management and pollution control equipment are equipment that manufacturers use to comply with environmental regulations. Many items are becoming popular due to the growing number of environmental laws that have been enacted, such as treatment plants for sewage, effluent treatment systems (ETS), solid waste management equipment, air quality monitors, water quality testing instruments, and services that dispose of hazardous waste.
The adoption of circular economy policies is promoting the development and sales of recycled content products in many different categories, including recycled plastic furniture and paper products and construction materials that contain recycled aggregates, including various types of refurbished I.T. equipment. The buyback and forward auction programs help to promote the recycling of products and extend their lifespan.
Sustainable building materials represent huge investments in building up the infrastructure while promoting a green economy. Examples of green building products that receive preferential purchasing for Smart Cities projects and under green building mandates include fly ash bricks, recycled concrete aggregate, bamboo products, low-carbon cement alternatives, energy-efficient glass, sustainable wood from recognized sources, and green insulating materials.
Lifecycle Costing: The Game-Changing Evaluation Methodology
With the advent of green procurement, it has moved away from evaluating procurements based solely on purchase price (L1) to evaluating procurements based on total cost of ownership (TCO) or life cycle costing (LCC). Understanding how this change impacts the pricing and positioning of green products is essential.
Traditionally, procurement has assessed all bids only on purchase price; i.e., bidder one (the bidder with the lowest initial purchase price), and so forth. This original approach disadvantages energy-efficient/durable products (due to their higher spending in the initial stages) over a longer period (with lower operating costs).
Life cycle costing looks at the total cost of ownership throughout the complete product life cycle, including purchase price, installation costs, operating costs (energy, water, and consumables), maintenance and repair costs, non-profit costs, and end-of-life costs (recycling/disposal). For example, an air conditioner may have a purchase price of Rs 50,000 and spend Rs 5,000 annually in electric costs throughout a 10-year life span, versus a 5-star energy-efficient A/C costing Rs 60,000 and using only Rs 3,000 annually in electric costs; after 10 years, the 5-star energy-efficient A/C has actually cost Rs 20,000 less despite a higher initial purchase price.
Products that have a "green" label can provide sellers with a competitive advantage by providing lifecycle costing solutions. For example, by creating a total ownership cost comparison, it can illustrate that higher initial pricing is justified and often preferred. Providing life cycle cost justification with technical proposals and energy use calculations, providing extended warranties indicating durable use, and providing quantified savings for reduced maintenance will help buyers to value your complete value proposition.
Lifecycle cost analysis is becoming an increasingly common component in the technical evaluation process for purchases by government agencies, particularly for those products that have a greater than average operating cost, such as HVAC equipment, vehicles, pumps, computers, and electrical equipment. Sellers that provide evidence from independent testing or actual installation results supporting the accuracy of their lifecycle calculations will have a distinct advantage in winning contracts against competitors that may be offering lower pricing but do not have lifecycle cost justification.
The embedding of life cycle costing into the evaluation of Smart City Mission projects, Infra projects (tenders by Railways and Defence), as well as large-scale procurement from Public Sector Units (PSUs), including NTPC, should point to the growing importance of life cycle costing. Sellers should gain a thorough understanding of the various methodologies available for creating lifecycle cost estimates for their product lines, create templates for creating lifecycle cost templates for their products, and train the sales staff to discuss total ownership value (TOV) as opposed to purchase price only.
Compliance Requirements: What Documentation You Need
When bidding on a green tender on the GeM (Government eMarketplace), it is essential to have the correct documentation and not just be able to present the quality certifications for your product. Preparing the correct green documents before a tender opportunity becomes available will help avoid the potential frustrations and delays that can occur once the tender is posted.
First and foremost, having the relevant environmental certifications for your products—Eco-mark, BEE star labels, and/or category-specific green certifications—is a must if the tender requires certified products as part of the Mandatory Tender Requirements. Since it typically takes 2-4 months to complete the application process, it is beneficial to start the application process as early as possible.
Next, you should create Environmental Product Declarations (EPDs) for each of your products that document the lifecycle environmental impacts of the product based on an ISO 14025 standard and Product Category Rules (PCRs). Although EPDs are not a mandatory requirement in every category at the moment, it is anticipated that within a short time frame, EPDs will become a standard expectation for tenders involving construction and infrastructure. Having EPDs prepared will place your company ahead of competitors that are utilizing the generic statements of environmental impact.
Lastly, it is important to keep all of your compliance documentation updated related to environmental regulations that may apply to your industry. This includes Waste Disposal Permits, Emission Compliance Certificates, Treatment Process Documentation for Effluents, and Handling Licenses for Hazardous Substances. As a result, an increasing number of buyers are conducting due diligence to verify that the sellers are in compliance with the applicable environmental regulations prior to awarding large contracts.
Using approved methodologies, calculate the carbon footprint (CF) for each of your products. Many solicitations now require you to submit CF data during the technical evaluation phase, and providing this information, along with the calculations and assumptions, will show environmental sophistication and enable purchasers to compare the climate impacts of your products to those of competing products.
If your products include any raw materials from natural resources, you need to document your sustainable sourcing practices. Chain-of-custody (COC) certification for wood products, sustainable palm oil certification, organic certification for agricultural inputs, and Fairtrade certification for commodities are all examples of ways to provide verifiable supply chain sustainability.
Create visual documentation of your sustainability efforts. In addition to product data sheets that highlight the environmental benefits of your products, infographics showing the lifecycle benefits of your products, case studies that document the performance of your products in the field, and comparative analyses that show the environmental benefits of your products compared to conventional alternatives will all provide government purchasers with the documentation they can use to support green procurement decisions back to their stakeholders.
Pricing Strategy: Making Green Products Cost-Competitive
Many customers find the increased price that most green products (also known as environmental) impose compared to immediate benefit products or competitors as making these green products unprofitable. Strategic pricing can eliminate pricing as a barrier.
When explaining your pricing to customers, include the projected operational savings resulting from your product. Instead of just telling customers that your product is "energy efficient," provide them with a calculation of the annual energy cost savings in rupees, the projected total savings over 5-10 years, and the payback time for the additional upfront costs to buyers of purchasing a green product. Government purchasers have responded positively to specific financial analyses that demonstrate to them that choosing a green product saves them money over time.
You may also provide financing or leasing options to address the upfront cost barrier associated with purchasing a green product. Energy performance contracts that allow suppliers to finance the installation of their equipment and for suppliers to recover the costs through guaranteed energy savings are becoming increasingly common for larger projects with high energy efficiency. Equipment-as-a-service models, in which customers pay a monthly fee instead of a one-time capital expenditure, are helping make the purchase of high-priced green products easier for government departments with tight budgets.
Include Bundle Life Cycle Services—Extended Warranties, Preventative Maintenance, Operator Training, and Performance History—as a part of your pricing package. These value add-ons enhance your offering's overall value while also showcasing your company's confidence in the strength and reliability of your product.
Use MSME benefits if available. (Green MSMEs have the preferential treatment when it comes to procurement and have L1+15% price matching options and lower EMD requirements.) On the flip side, when an MSME is able to obtain an order from a buyer that is already taking advantage of the preferred MSME treatment and using an approved MSME vendor, they will likely be more willing to accept a premium on their green product because they are already benefiting from procurement opportunities associated with being an MSME.
Join demand aggregation opportunities where many buyers are combining their needs. The increased total quantity of orders received results in a decrease in your average manufacturing costs and a corresponding increase in your profit margins for each order processed. The benefits of making green products available through demand aggregation are that as the volume of green products manufactured increases, the cost efficiency and buying power of raw materials used to manufacture green products increases dramatically.
The Road Ahead: Preparing for Mandatory Green Standards
Green procurement is increasingly becoming a standard legal requirement in government contracts. Suppliers without green compliance preparedness will be competing at a disadvantage if they wait to reinterpret their product offerings after being mandated by law... Meanwhile, those who have prepared will experience an advantage by capturing additional market share prior to suppliers that are not prepared.
Footprint India's National Green Procurement Policy draft of 2025 outlines the intent to implement a formalized approach of systematic green procurement at all levels of government. Implementation of the proposed policy will result in setting mandatory green procurement criteria across multiple product tariffs or categories, the requirement for lifecycle costing of major government tenders, and the establishment of percentage quotas for green procurement across all ministries and departments.
As per projections, the development trend indicates that 51%+ of government tenders will have mandatory green compliance provisions by the year 2030. This projection is firmly grounded in India’s International Climate Change Obligation, the Union Budget’s priorities for creating green infrastructure, and the actualization of government policy implementation.
Green building codes, renewable energy integration, and sustainable mobility are being mandated and embedded in many current Smart Cities Mission projects. The Defence Ministry's pilot project for building renewable energy-powered cantonments, DMRC's ongoing use of green procurement in their Metro infrastructure expansion efforts, and the Indian Railways' net-zero carbon commitment all demonstrate the growing commitment from major government buyers to making sustainability a non-negotiable item.
Benefit from the growing demand for environmentally sustainable products by engaging in a “Green Transition.” Businesses can demonstrate their commitment to sustainability by obtaining environmental certifications for all product categories offered. Lifecycle cost justifications on new and existing offerings go hand-in-hand with their sustainability profile development. It is beneficial to partner with certification bodies and environmental consultants to integrate environmental sustainability into all product lines offered. Products should also be registered in GeM's Green Product categories and special collections.
Invest resources into your product development process to increase the amount of environmentally sustainable materials you use to develop products that meet the criteria for the Green Product designations. By making incremental environmental improvements, such as reducing energy consumption by 20%, increasing the use of recycled content to 30%, eliminating hazardous materials used to produce products, and extending the lifespan of products, you can provide your customers with valuable competitive advantages as the Green Product criteria tighten.
Create environmental capabilities within your organization by achieving ISO 14001 certification or an equivalent environmental management system. Vendors are now evaluated on their system of environmental management in addition to their product specifications. Companies with an established and systematic environmental management system will be favored when evaluating contract awards.
Monitor the Tender Requirements section on GeM for the emerging green criteria for all product categories you can sell. Vendors should prepare for an impending requirement for all products to provide environmental data or certifications to be considered for an award in their product category. Prepare for new Green criteria before they are established as mandatory specifications.
The Bottom Line: Green Is No Longer Optional
GeM's policy on sustainability procurement has completely altered the way in which the government purchases products and services. Government buyers will now evaluate bids on environmental performance, price, quality & delivery as equal factors in determining the successful bidders of contracts.
The Union Budget of Rs 11 lakh crores includes large spending on green infrastructure projects; 25% is to be set aside in every contract for Micro, Small & Medium Enterprises with an emphasis on Green MSMEs; lifecycle costing is now being used on all major tenders; and the government is heading toward net-zero emissions. These developments indicate that green procurement is the way forward for all those involved in government contracting.
For government suppliers, there is no longer any choice but to invest in obtaining environmental certifications, developing an effective justification using lifecycle costs for each product offered, improving the sustainability of their products, and positioning themselves for green contracts. Alternatively, companies that have made these investments will take advantage of the green procurement opportunities that exist, while providers who do not will be left out of any future tenders from which non-compliant bidders will be disqualified at the qualification stage.
There's a great deal of opportunity in the Government e-Marketplace (GEM), which has seen an increase of more than double the number of "green tenders" offered since 2020 (as per World Bank statistics) and will continue to see that trend continue at a greater and greater pace in the future. Government buyers aren't reluctantly adding "green" requirements to their purchases; they are actively seeking suppliers that can provide them with products and services that will help them to reach their institutional sustainability objectives.
To be successful as a supplier of these kinds of products and services, you need to:
Put aside the notion that sustainability is merely a compliance burden. It's actually a great opportunity for a competitive edge. Those suppliers that embrace "green standards" early on will build a strong reputation as the "go-to" environmental vendor and create strong working relationships with buyers that place high value on sustainability, thus positioning themselves for long-term success over the course of the next ten years, as "green procurement" becomes the standard.
GEM will achieve its green procurement dominance through the Green Gold Collection, the implementation of Green Transition Services, Eco-Label Filters (filters that allow buyers to filter their search results by environmental label), and the circular economy. Very soon, GEM will systematically build out its infrastructure to take over as the leader in this emergent green procurement marketplace.
Those suppliers that embrace and align with the direction of GEM will do very well. Those that resist will find themselves competing for a much-diminished marketplace for conventional products while losing out on the fastest-growing segment of the government procurement marketplace—the "green" segment.
Get yourself certified, adopt green practices, and take lifecycle thinking into account when strategizing for the rapidly evolving green procurement landscape in India. The contracts that you will be awarded in the future depend on your current sustainable investments.
