The Government e-Marketplace (GeM) has introduced several important changes in 2026 that could make government procurement more attractive for MSMEs and other small suppliers.
The biggest change is that the zero-transaction-charge limit has increased from ₹5 lakh to ₹10 lakh, while the standard transaction charge has been reduced from 0.50% to 0.30%.
Here are the 7 important GeM changes MSME suppliers should know in 2026.
GeM has increased the order-value threshold for zero transaction charges from ₹5 lakh to ₹10 lakh.
The current structure announced by the government is:
| Order value | GeM transaction charge |
|---|---|
| Up to ₹10 lakh | Nil |
| Above ₹10 lakh to ₹10 crore | 0.30% |
| Above ₹10 crore | Maximum ₹3 lakh |
According to the government, nearly 97% of GeM orders now attract no transaction charges.
For example, on a ₹20 lakh order, a 0.30% transaction charge would be ₹6,000.
For an MSME operating on tight margins, lower transaction costs can make government orders more attractive.
GeM has also reduced vendor assessment charges applicable to Original Equipment Manufacturers (OEMs) by 66% to 92% since January 2024.
This can reduce the cost of participation for eligible manufacturers.
However, MSMEs should check the current assessment requirements applicable to their specific product or category before listing products on GeM.
One of the most important developments for MSMEs is GeM’s integration with all five Trade Receivables Discounting System (TReDS) exchanges.
TReDS can help eligible MSMEs obtain finance against their receivables instead of waiting for the full payment period.
In simple terms:
GeM order → Invoice/receivable → Financing opportunity → Earlier access to working capital
This can be particularly useful for MSMEs that receive large orders but face cash-flow pressure while fulfilling them.
GeM SAHAY is another financing facility aimed at helping eligible sellers access working capital.
The government says GeM SAHAY provides collateral-free lending against eligible GeM purchase orders.
This could help a small business finance the production and delivery of an order without having to arrange all the working capital upfront.
However, receiving a GeM order does not automatically guarantee a loan. Financing remains subject to the applicable lender and borrower eligibility conditions.
The opportunity on GeM is already substantial.
During FY 2025–26, MSMEs recorded procurement of approximately ₹2.37 lakh crore through GeM.
Government data also shows that more than 11.75 lakh MSMEs were registered on the platform as of July 2026.
GeM has crossed ₹20 lakh crore in cumulative Gross Merchandise Value (GMV) since its launch, while Micro and Small Enterprises have fulfilled orders worth more than ₹9.07 lakh crore over the platform’s history.
For a small business, this means GeM is no longer simply another government tender website. It has become a significant digital procurement marketplace.
This is one of the most important things new sellers should understand.
Registering on GeM does not automatically bring government orders.
Success depends on factors such as:
Therefore, MSMEs should not join GeM simply because registration and transaction costs have become more attractive.
They should first identify products that have genuine government demand and calculate whether they can supply them profitably.
The latest GeM reforms are important because they address three major MSME concerns:
Lower cost: Reduced transaction charges
More market access: Opportunity to sell to government buyers
Better working-capital options: TReDS integration and GeM SAHAY
For a small manufacturer, trader or service provider, this combination can be more valuable than any single GeM reform.
GeM may be worth exploring if your business:
Before submitting a bid, calculate your complete cost, including raw materials, packaging, GST, transportation, financing costs and profit margin.
You can explore the BusinessZindagi Business Tools to calculate business costs and prepare quotations.
If you are new to GeM, read our GeM Portal Guide for MSMEs for registration, eligibility and selling to government buyers.
The 2026 GeM changes make government procurement more attractive for MSMEs.
The increase in the zero-charge threshold to ₹10 lakh, reduction of the transaction charge to 0.30%, lower OEM assessment fees and integration with TReDS can reduce some of the cost and working-capital challenges faced by small businesses.
But lower charges alone will not guarantee success.
The real opportunity is to identify the right products, price them competitively, maintain quality and delivery standards, and use GeM as another important sales channel.
For an MSME, the question is no longer simply “Should I register on GeM?”
The better question is: “Which of my products can I competitively sell to government buyers through GeM?”
PIB — GeM Samvad 2026: Latest GeM reforms
https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2329780&lang=1®=1
PIB — MSME procurement through GeM reaches ₹2.37 lakh crore in FY 2025–26
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2297820&lang=1®=48
PIB — GeM completes 10 years with cumulative GMV above ₹20 lakh crore
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2296138&lang=2®=48
Official Government e-Marketplace (GeM)
https://gem.gov.in/
This article is for general informational and educational purposes only. GeM rules, fees, eligibility criteria, financing facilities and procurement conditions may change from time to time. The information is based on official government sources available at the time of publication. MSMEs should verify the latest rules, charges and eligibility requirements on the official GeM portal before making any business or financial decision.
BusinessZindagi does not guarantee government orders, financing approval or any specific business outcome from registering or selling on GeM.
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