The procurement environment for the Indian government is experiencing a drastic transformation that will influence which companies are successful and which ones will find it difficult to compete for the remainder of this decade. By the year 2026, all Indian government tenders, including the e-Marketplace (GeM) e-commerce ecosystem worth Rs 13.60 Lakh Crore, will adopt mandatory criteria related to environmental sustainability. This transformation is underpinned by India’s net zero aspirations by 2070, a Rs 15 Lakh Crore allocation to 'green' infrastructure in the Union budget, and GeM's 2024 Guidelines, which will require that environmental criteria are included in 20% of all new invitations for bids from GeM-accredited suppliers (approximately 2,800 suppliers, many of whom will not have any green compliance). As a result, suppliers must now take into consideration environmental sustainability when producing their goods or services.
While this transformation offers both challenges and opportunities, suppliers who have already invested in environmental certification, developed eco-friendly goods, and adopted lifecycle costing principles are benefitting from the expanding environmental criteria in Indian government procurement. Conversely, suppliers who have not yet adapted to new environmental standards will soon be completely excluded from the market, as procurement officials will automatically exclude all non-compliant suppliers based on their sustainable supply chains at the qualification phase of the procurement process. It is anticipated that by 2026, the World Bank estimates that over half of all Indian government procurement invitations for bids will require environmental compliance, making the next three years critical in the evolution and transformation of sustainable procurement practices.
The Policy Framework Driving Mandatory Green Procurement
By understanding how the policy frameworks for sustainability are evolving toward mandatory implementation, suppliers will be able to better plan and prepare for the impending requirements. A number of policy initiatives across national and ministry levels are also converging toward a common goal: To establish Green Criteria as mandatory (non-negotiable) by 2026.
Beginning in 2024, GeM's updated Sustainability Guidelines will require buyers, as part of their procurement process, to factor into their evaluation of tenders a minimum of 20% of the environmental criteria. This minimum percentage will not remain static; the percentage will steadily increase over the next two years, and by 2026, a significant proportion (35-40%) of all tenders will require buyers to evaluate explicitly the environmental performance of goods and services.
The National Green Procurement Policy Draft, created in partnership between UNEP and TERI, lays out a comprehensive framework for how procurement processes will systematically incorporate environmental goals. When implemented (in 2026), this policy will require that every product category that contributes to approximately 30% of India's GDP in public procurement implement green criteria. The policy will require phased-in implementation, with clear phased targets, standardized environmental requirements, and a monitoring system.
These established policy initiatives, including the updated Sustainability Guidelines and Draft National Green Procurement Policy, provide significant opportunity for suppliers to engage proactively with their customers and improve the environmental performance of their products.
Each ministry has established directives to support the implementation of sustainable practices. For example, the Ministry of Housing and Urban Affairs requires that all government projects use green building codes once the new building is larger than a certain square footage; also, the Ministry of Power states that any HVAC system or lighting used in a government building must have at least a minimum rating of two stars (BEE) or four stars (5), respectively; and the Ministry of Road Transport provides incentives for electric vehicle purchases through preferential treatment through procurement.
The Indian Railways has a goal to become Net-Zero Carbon by 2030 and therefore has developed the largest procurement program for renewable energy, along with the largest focus on energy-efficient rolling stock and the greatest antitrust support for building sustainable rapids. The hierarchical adoption of green procurement practices by the Delhi Metro creates a benchmark for public sector organizations.
The development of Smart Cities Mission initiatives has incorporated the use of reference to the requirements of using green building codes and the use of a renewable energy supply and sustainable urban transportation as base specifications for infrastructure contracts. The Public Procurement Preference to Make in India Order intends to expand the use of environmental compliance requirements alongside domestic manufacturing requirements within its policies. Therefore, there are advantages in the marketplace for manufacturers within India who produce environmentally compliant products, with the added dual advantage of being able to claim preference under the Make in India Order plus also having the Green Procurement Weightage associated with those products. These dual advantages create strong incentives for manufacturers in India who accept environmental sustainability and produce products that meet Green Standards.
GeM's Green Categories and Filters: The Operational Reality
GeM has transitioned from pilot projects to successfully implementing the features of GES to assist buyers in their everyday choices related to purchasing and providing sellers with a structured process to promote environmentally sustainable products.
The Green Gold Collection (GGC) serves government agencies with an expanding list of bamboo-based products for use in the areas of construction and décor. Bamboo is a rapidly renewable resource and has a much lower carbon footprint than traditional building materials. It also supports sustainable forestry practices, which is critical as green infrastructure projects become more widespread. The GGC provides suppliers who sell bamboo-based products with access to buyers who specifically seek out sustainable material options.
Buyers have access to marketplace filters that make it easy to identify renewable energy products. These filters include solar inverters, solar streetlights, solar water heating systems, battery-powered e-rickshaws, and other clean energy solutions. As government agencies work toward their renewable energy goals as stated in the Nationally Determined Contributions for India, these marketplace filters make sustainable choices easier for buyers than traditional options. Sellers who do not optimize their product listings for these marketplace filters may not realize the opportunities they have to promote their genuinely green products.
The Eco-mark certification filter provides buyers with a way to limit their search results to only those products (registers) that meet the environmental guidelines set forth by the Central Pollution Control Board. Today, nearly 90% of writing and printing paper purchased through GeM consists of Eco-mark certified paper made from recycled or agro-based fibers rather than virgin pulp. This illustrates the impact that the certification filter has on actual purchasing behavior once incorporated into the Gem platform. Additionally, this will serve as a preview of what will occur as more product categories adopt mandatory certification requirements.
Through the use of “forward auction” mechanisms, government entities can further encourage the adoption of the circular economy model through their auctioning of all fully depreciated or obsolete assets. This approach prevents obsolete assets from being dumped into landfills. The availability of using a buyback option in 37+ product categories allows sellers to determine a price for their new product while also quoting a price on the buyback of the older version(s) (e.g., prior to recycling). The use of this kind of program supports the development of proper lifecycle management of the equipment and ultimately reduces waste (i.e., e-waste). It is anticipated that by 2026, the number of categories with buyback implementations will increase exponentially as standards for implementing circular economy principles are adopted and further integrated into the procurement framework.
The Government e-Marketplace (GeM) is now offering a structured framework through their Green Transition Services, which will help government buyers achieve carbon neutrality/net-zero by providing the following service components: Preparation of a Greenhouse Gas (GHG) Emissions Inventory, developing an accounting methodology for GHG emissions, computing a carbon footprint, and providing comprehensive roadmaps to help government buyers achieve their emissions targets. Environmental consultants may also view this service as a monetized opportunity. All major Public Sector Undertakings (PSUs) and Central Ministries are currently pursuing Institutional Carbon Neutrality Goals (i.e., to become carbon-neutral).
Mandatory Green Certifications: What Sellers Must Obtain by 2026
Each separate category of voluntary green certifications is becoming mandatory in its respective category. By knowing which ones will become required certifications, suppliers can make informed decisions regarding their respective capital allocative priorities for complying with them in the future.
The expansion of the Eco-Mark Certification program from voluntary to mandatory is occurring for specific categories of products. Since 2015, the introduction of the 2025 Eco-Mark Rules has improved the efficiency of the application process while retaining rigorous environmental standards so that MSME companies may apply for the certification and still maintain their credibility and, in turn, create competitive products. By 2026, many types of products, including papers, soaps and detergents, paints and coatings, batteries, electrical products, textiles, and plastics, will require that bidders possess an Eco-Mark Certification to qualify for the bid.
The adoption of the BEE Star Rating System as a mandatory minimum specification is occurring for product categories such as air conditioners, refrigerators, fans, pumps, motors, transformers, and LED lamps, as examples. Current trends show that buyers (the government) are now requiring that bidders have either a 4-star rating or a 5-star rating for their products to qualify for consideration under the tender process. The 3-star ratings will become the minimum qualification rating for all bidders in 2026, while products with a 5-star rating will be given preference.
ISO 14001 Environmental Management Systems certifications have evolved from a vendor differentiator to an industry standard. Although ISO 14001 certifications are not product-specific, they provide evidence of a vendor's commitment to environmental performance through the use of a formalized and systematic approach to managing the environmental impacts of their business. While buyers evaluate a vendor's sustainability practices as part of the overall assessment of their products for large contracts, ISO 14001 is now typically viewed as a qualifying factor rather than just an advantage.
As green building standards become law through the Smart Cities Mission and other initiatives, suppliers of construction-related products, including low-VOC paints, recycled-content concrete, energy-efficient windows, sustainable wood products, and water-efficient fixtures, are finding that Green Building Material Certifications from IGBC or GRIHA are quickly becoming compulsory. Many companies, especially those who supply conventional construction materials, will be required to obtain these certifications due to the increase in demand for green building products.
As infrastructure projects require buyers to provide the carbon footprint of their proposed construction, buyers are beginning to look at other variables such as the lifecycle carbon of each product, rather than just the initial purchase price. In the near future, by 2026, Environmental Product Declarations developed by accredited programs will become an industry standard in infrastructure projects and will eventually lose their niche classification.
Lifecycle Costing: The Evaluation Methodology Transforming Competition
Lifecycle costing approaches provide a way to assess a product's total cost of ownership over its lifecycle and provide a shift in how green products and services can compete against traditional products and services. As such, it is essential for all organizations to have an understanding of this change when developing pricing and positioning strategies for green products and services.
Traditionally, when evaluating bids for procurement, L1 bids were evaluated on the basis of the purchase price; this meant that the lowest-priced bid would automatically win, regardless of any consideration given to the cost of operating, maintaining, or replacing a product throughout its lifecycle. As a result, energy-efficient and durable products with higher initial purchase prices were systematically at a disadvantage to all other products, as these same products typically had much lower costs associated with their operations over their lifecycles.
Lifecycle costing provides a mechanism to evaluate all costs associated with a product throughout its lifecycle, from the time it is purchased, through its installation, use, and maintenance, to its disposal and/or recycling at the end of its lifecycle. Thus, a 5-star energy-efficient air conditioning unit, with a purchase price of Rs 60,000 and an average annual electrical consumption cost of Rs 3,000 over a 10-year period, would cost Rs 20,000 less than a conventional air conditioning unit with a purchase price of Rs 50,000 and an average annual electrical consumption cost of Rs 5,000, even though the energy-efficient unit has a higher purchase price.
The Smart City Mission, railway infrastructure tenders, defense procurement, and large PSU contracts have all begun to incorporate life cycle costing in their evaluation criteria. As part of this trend, procurement officers are being provided with training on life cycle costing methodology, standardized calculation templates are being created, and the technical evaluation committees are increasingly requiring justification of life cycle costs as part of their evaluation of bids.
The idea behind using life cycle costing is to provide sellers of eco-friendly products with a way to demonstrate their total cost of ownership savings, thereby creating an advantage for them at the beginning of the bidding process by allowing them to offer a higher initial selling price. By incorporating life cycle cost analysis in their technical bids, providing independent testing reports for energy consumption measurement, offering extended warranty coverage on their products, and quantifying the cost savings associated with their maintenance, sellers can provide evidence to buyers of the complete value they are offering.
Germany has implemented a mandatory “Life Cycle Costing” clause in all major infrastructure tenders, while South Korea has created a comprehensive database for Green Public Procurement, both of which are models for the future for India. By 2026, life cycle costing will become a requirement for most tenders for projects exceeding the value of Rs 1 crore and will significantly alter the competitive landscape by favoring quality, efficiency, and durability over the lowest initial selling price.
Product Categories Seeing Mandatory Green Criteria in 2026
Rapidly evolving product categories are moving from optional green preferences to mandatory sustainability requirements, forcing suppliers in these categories to comply immediately.
The most intense green mandates apply to renewable energy products, such as solar panels, inverters, battery systems, and components for wind energy. Manufacturers of renewable energy products must now obtain proofs of domestic manufacturing, BIS certification, and minimum efficiency ratings and demonstrate that they meet all the environmental compliance requirements for their entire supply chain. An example of this is the procurement volumes generated from Indian Railways' stated target of reaching net zero and building a massive volume of renewable energy facilities throughout all of the Government of India's facilities, where green compliance is the minimum level of compliance.
Electric vehicles and their supporting infrastructure are a direct beneficiary of the aggressive policy push by the Government of India, as various government ministries are moving towards an electric fleet. The electric buses that are being procured for operation and maintenance programs, the electric cars for official use, the e-rickshaws used for last-mile connectivity, and the EV charging stations are regularly being given preferential treatment in the procurement process and increasingly being required to meet the mandatory specifications for all domestic manufacturers who meet the required emission and safety compliance standards.
Energy-efficiency measures throughout HVAC and lighting systems must include BEE (Building Energy Efficiency) ratings of 4 stars or higher or be of type 1 or 2 in order for suppliers of these types of systems to qualify for government building tender opportunities.
This means that energy-efficient LED lighting and building automation systems must meet minimum efficiency benchmarks before they can be considered for bidding by a government building. Because of this requirement, any products that fail to meet these benchmarks will not be evaluated for price comparison with other compliant lighting or HVAC system products.
In order to meet green building mandates, all construction materials must comply with green building standards. This includes using a low-carbon cement alternative, aggregates made from recycled material, sustainably sourced wood from certified sources, low-VOC paints (volatile organic compounds), and Energy Star-compliant insulation. Suppliers without Green Building Material Certifications will not be eligible to bid on government-sponsored Smart City projects or any other Green Infrastructure projects.
Electronics or IT hardware must meet two separate certifications, i.e., BIS Certification and E-Waste Management Compliance under EPR Regulations for bids on electronics/IT hardware. To demonstrate compliance with the E-Waste Regulations, laptops, desktops, printers, and servers must be registered for Extended Producer Responsibility, comply with mandatory Energy Efficiency Standards, and have passed Material Safety Tests. Criteria for the circular economy will become part of normal technical specifications for bids on electronics by the year 2026, including repairability, recyclability, and take-back programs.
Practical Compliance Roadmap: What Suppliers Must Do Now
Suppliers serious about maintaining government business through 2026 and beyond need systematic approaches to building green compliance into their operations and offerings.
Perform a comprehensive certification gap analysis. Identify which environmental certifications apply to your product categories, what certifications currently exist for those categories, and what are the certification gaps I have preventing you from submitting bids on a tender containing a requirement to comply with "green" criteria. Identify the highest priority certifications to obtain (i.e., Eco-mark for primary products, BEE star rating for energy consumers, and ISO 14001 for global environmental management) for products whose certification requirements will become effective quickly.
Develop lifecycle cost documentation for all major classes of products. Provide standardized templates that outline the total costs of ownership over the average lifecycle of the products (purchase price, installation, energy consumption, maintenance, & end-of-life disposal). Justify the lifecycle costs of products using data collected from independent, verified testing, actual installation experience, and comparative analyses against standard conventional-type products. Make lifecycle cost justification part of your standard technical proposals.
Invest in research and development of new products focused on improving the environmental impact. The small incremental improvements made in energy efficiency, etc., will provide a distinct competitive edge as environmental criteria become more stringent. Don't wait until the new requirements are in place to begin making improvements, but rather get ahead of the competition by becoming proactive with improving product lines now.
Environmental competency has become an integral aspect of organizations' decision-making in regard to vendors; therefore, an organization can create a competitive advantage by obtaining ISO 14001 and/or equivalent certified environmental management systems. Vendors with a systematic way of managing their environmental impact are preferred by buyers but, in fact, may even influence a buyer to forgo certain environmental product specifications due to the organization having demonstrated a superior level of sustainability through ISO certification.
Optimize your product(s) for any green filters/categories in GeM's listing. For instance, a vendor should ensure that when a buyer searches for eco-mark, renewable energy, or other associated green categories, their product will show up in those listings. In order to maximize your products' chances of being found, upload relevant eco-mark certification documents, make sure to proudly include sustainability aspects of your products within the product descriptions, and ensure that you are providing information about the products' carbon footprint (or other similar) and/or energy efficiency. Your presence in the green searches of buyers' lists is just as important as your certification documents.
Vendors should actively monitor the tender specifications of any categories that they have products in for any upcoming spurts of new green specifications. When buyers start adding essential elements such as environmental certification and/or data, even if only as part of the optional evaluation criteria, this should signal to the vendor the need to develop products with such elements before they are actually mandatory; by that time, the vendor will have been eliminated from the bidding process.
The International Context: India's Position in Global Green Procurement
The nomenclature we use to understand the evolution and impact of India's green procurement within the broader context of global supply chain development may help you predict your path forward and prepare for future challenges. India has become a developing country at a much faster rate than developed countries have in implementing mandatory sustainability through contracts for supply chains.
For example, Germany has required lifecycle cost analysis on all major infrastructure contracts since 2001 and has established mandatory specifications for green contracts in greater than 60% of all public procurement contracts. Additionally, South Korea has established a comprehensive database for green public procurement that contains standardized environmental specifications. Finally, the United Kingdom has put in place a requirement for public authorities to carry out environmental impact assessments prior to making procurement decisions as part of their Sustainable Procurement Duty—an example of a public authority’s responsibility to consider sustainability in all procurement practices. As demonstrated by the examples of Germany, South Korea, and the United Kingdom, international benchmarks indicate how far India can go.
According to the World Bank's 2024 Green Procurement Index, India has been identified as an "emerging leader" in sustainable procurement, with an estimated green procurement adoption rate of 25-30%, and is now rapidly accelerating this rate of adoption. This designation validates the direction that India is taking in sustainable practices, while at the same time highlights the disparity between India and developed countries, where green procurement percentages range from 60% to 70%, so that by 2026-2030, India can achieve even greater sustainable procurement success than it has as of 2023.
The European Union Green Deal's mandate for GPP reflects the global direction of policy. Indian involvement with international climate commitments, such as the Paris Agreement and the Sustainable Development Goals, means that India's public sector procurement processes must meet the internationally accepted sustainability standard. As India aims to provide leadership in respect to climate change, government procurement processes must show this commitment in a concrete manner.
The global context is significant for Indian suppliers; it provides preparation to enter the export markets as green supply criteria rise in India. Various environmental certifications needed for government tenders within India—ISO 14001, carbon footprint declaration, and green product certification—are also increasingly required by international purchasing entities. Therefore, investing in environmentally compliant products will provide a return on your investment at home and abroad.
The Bottom Line: Green Compliance as Competitive Necessity
By 2026, green procurement transitions from emerging trend to established norm in Indian government contracting. Environmental criteria embedded in 50%+ of government tenders, mandatory certifications eliminating non-compliant bidders, lifecycle costing favoring sustainable products, and buyer training on green evaluation all converge to make sustainability non-negotiable.
For suppliers, the strategic imperative is clear: invest in green compliance now or face progressive exclusion from government business. Obtain relevant environmental certifications, develop lifecycle cost justification for your offerings, improve product environmental performance, build organizational sustainability capability, and optimize your market positioning for green procurement requirements.
The Rs 13.60 lakh crore GeM ecosystem, Rs 11 lakh crore Union Budget allocation toward green infrastructure, and India's net-zero commitment by 2070 all point one direction—green procurement dominance is arriving now. Suppliers who embrace sustainability as competitive advantage rather than compliance burden will capture market share as green criteria expand. Those who resist will find themselves competing in shrinking markets for conventional products while excluded from fastest-growing government procurement segments.
Start your green transition today. The contracts you win in 2026 and beyond depend on the sustainability investments you make right now.
