Introduction
In FY 2023-24, GeM witnessed a remarkable 205% growth in procurement of services compared to the previous fiscal year. This surge has elevated the services segment to contribute nearly half of GeM’s Gross Merchandise Value (GMV) of ₹4 lakh crore, reshaping the opportunity landscape for vendors offering services.
Service categories are broad: transportation, logistics, consultancy, waste management, event and exhibition services, webcasting, printing, and others. For vendors, especially MSMEs, this represents a major opportunity, if they position themselves right. Let’s examine what this growth means and how service providers can capitalize.
Growth Trends at a Glance
Procurement of services jumped from ~₹66,000 crore in FY 2022-23 to ~₹1,82,000 crore in FY 2023-24 (as of February 22, 2024), a growth of ~176%.
GeM’s GMV overall crossed ₹4 lakh crore in FY 2023-24, with services contributing nearly 50% of that total.
States including Gujarat, Uttar Pradesh, and Delhi were major contributors to this growth; central ministries and CPSEs also accounted for about 85% of the Rs 4 lakh crore milestone.
What Kinds of Service Tenders Are Surging
Key services categories showing rapid growth include:
Transportation & Logistics: Hiring vehicles, delivery services.
Insurance Services: Group Mediclaim, asset insurance, etc.
Consultancy & Professional Services: Advisory, event-management, exhibitions, seminars.
Sanitation & Waste Management Services: Contracts for collection, lifting, transportation, disposal.
Digital/IT Services: Webcasting, email services, data center operations, printing.
Why the Surge is Happening
Several factors underpin this sharp increase:
Buyer Preference Shift: Government departments are increasingly using GeM not just for goods but for recurring services, maintenance, contracts that previously were managed via offline tenders. The appeal is in transparency, speed, and accountability.
Ease of Onboarding: With more service categories (320+) now listed, new vendors find it easier to register and bid. GeM’s expanding catalogue makes matching of vendor offerings easier.
GMV Milestone & Government Push: The portal’s target and performance metrics favor accelerating services procurement. With improved digital tools and emphasis on “One Government, One Platform”, departments are more willing to use GeM for varied services.
Inclusive Participation: MSMEs, women-led businesses, SC/ST vendors, artisans, etc., have benefited—GeM claims nearly 50% of the Rs 4 lakh crore value has been awarded to marginalized sellers/service providers.
What Vendors Offering Services Must Know to Capture Opportunity
Steps/Vendor Strategy | Reason / Benefit |
Ensure Category Coverage | Register for all relevant service categories on GeM to maximize visibility. |
Build Past Performance & Rating | Buyers look at past execution; good ratings fetch trust. |
Price Competitively + Transparent | With service tenders increasing, many vendors compete closely on price–but quality & SLAs matter. |
Compliance & Documentation Ready | Contracts will require proof of capability, past work, certifications etc. |
Quick Mobilization & Lifecycle Understanding | Service contracts often require operational continuity, maintenance, prompt response. |
Use GeM Analytics | Monitor buyer trends, categories in demand, pricing, to adapt offerings proactively. |
Challenges in Service Tendering via GeM
Some vendors may lack capacity to deliver large service contracts or maintain service levels.
SLAs: Service Level Agreements’ metrics could be strict, including penalties for delays or non-performance.
Payment Terms for services may suffer delay; POs/orders must be tracked carefully.
Marketplace saturation: In service categories, many vendors bidding means competition is stiffer.
Case Examples & Recent Data Points
In FY 2023-24, services procurement reached ~₹1.82 lakh crore vs ~₹66,000 crore in FY 2022-23.
Two large tenders by South Eastern Coalfields Ltd (a Coal India arm) worth nearly ₹40,000 crore boosted the services’ share during a particular month.
GeM’s buyer base: ~1.5 lakh government buyers and 21 lakh sellers & service providers.
Forecast & What to Expect Next
Services procurement share is likely to stay above 50% of GeM’s order value in coming years.
Growth in specialized/technical services, cybersecurity, data services, AI/ML related services
More states catching up, expanding local procurement of services.
Possibly new service categories being added to cover gaps or newer demands (healthcare support, green services, remote infrastructure).
Conclusion
GeM’s 205% growth in service procurement isn’t just a number, it signals a structural shift in how the government is sourcing services. For vendors, this opens new avenues. But success will depend on readiness: having appropriate credentials, understanding buyer expectations, competitive pricing, strong performance history, and agility.
If you’re in the service delivery domain, this surge is your moment. Align your operations, register where needed, track category additions, and aim for high SLAs. Governments will keep favoring efficiency, transparency, and reliability and service providers who deliver on these will win.
