India's government procurement landscape is undergoing a fundamental transformation in 2025. Two powerful policy initiatives—Make in India and Vocal for Local—are reshaping the Government e-Marketplace (GeM). These programs are creating unprecedented opportunities for domestic suppliers, MSEs (Micro and Small Enterprises), and startups. As of July 2025, GeM has achieved ₹14.77 lakh crore in total procurement value since inception. The platform processed over 7.2 million orders in FY 2024-25 alone. This digital revolution represents more than procurement efficiency. It is fundamentally building a self-reliant, inclusive economic ecosystem that prioritizes Indian-made products and grassroots entrepreneurship.
Make in India: Foundation and Evolution to Make in India 2.0#
The Make in India initiative was launched by the Government of India to promote domestic manufacturing. It aims to position India as a global manufacturing hub. The initiative encourages businesses to manufacture products within India. It also promotes the use of Indian-made products in government procurement.
The Public Procurement (Preference to Make in India) Order, 2017 established the legal framework for this initiative. It mandates that government departments prioritize domestically manufactured products in their procurement decisions. This framework applies to all tenders floated on GeM and other government procurement platforms.
Understanding Class I and Class II Local Suppliers#
The foundation of Make in India on GeM rests on a sophisticated supplier classification system.
- Class I Local Suppliers require 50% minimum local content. They enjoy the highest preference priority. They can match L1 (lowest bid) prices within specified margins. They qualify for up to 50% of tendered quantities.
- Class II Local Suppliers have 20% minimum local content. They form the secondary preference tier. They are eligible for price-matching within L1+20% margins.
This classification has transformed bidding mechanisms. Rather than awarding contracts purely on lowest price, GeM now operates a three-tier system. Class I suppliers within L1+20% can match the lowest bid and secure contracts. This protects domestic manufacturers from being undercut by cheaper imports. It maintains competitive pricing simultaneously.
Bidders claiming Make in India preference must submit self-certifications of local content percentage. Contracts above ₹10 crore require auditor-verified documentation.
By July 2025, this framework has encouraged an estimated 40%+ increase in domestic supplier registrations on GeM. The Ministry of Coal—GeM's top procurer with ₹1.63 lakh crore in transactions—demonstrates this in practice. Over 320 major infrastructure contracts were awarded to Class I local suppliers.
Vocal for Local: Government Support for Grassroots Entrepreneurs#
Vocal for Local is a government initiative that encourages the purchase of products made by Indian businesses. The initiative promotes locally-made goods and supports grassroots entrepreneurs. It aims to strengthen India's domestic economy by prioritizing Indian-made products in procurement decisions. The program focuses on supporting small businesses and entrepreneurs from disadvantaged regions.
Vocal for Local: The Aakanksha Marketplace Initiative#
In March 2024, NITI Aayog launched Vocal for Local as part of its Aspirational Blocks Program. This created a direct pathway for grassroots entrepreneurs to access government procurement.
The Aakanksha brand was created under this initiative. Aakanksha means "aspiration" in Sanskrit. The brand consolidated indigenous products from 500 aspirational blocks across all 329 Indian districts. This created the world's first digital marketplace exclusively dedicated to disadvantaged region entrepreneurs.
How the Aakanksha Window Works#
The dedicated Aakanksha window on GeM operates with unique features. It provides a separate procurement channel with dedicated product categories. Government buyers can filter purchases specifically supporting aspirational block entrepreneurs.
Enhanced support infrastructure includes several key components:
- Free e-commerce onboarding
- Financial and digital literacy programs
- Certification assistance
- Skill enhancement initiatives
These are critical for entrepreneurs unfamiliar with online commerce.
As of November 2025, Vocal for Local demonstrates remarkable traction:
- Over 500 product categories mapped from aspirational blocks
- More than 8,000 sellers onboarded
- Over ₹2,500 crore in transactions
- 15% month-on-month seller growth
- 22% women entrepreneurs
- 18% SC/ST entrepreneurs
MSE Purchase Preference: The Game Changer#
The government has institutionalized MSE support through binding procurement targets. Every central ministry, department, and PSU must source:
- 25% of annual procurement from MSEs
- Of this, 4% must come from SC/ST-owned MSEs
- 3% from Women-owned MSEs
MSEs have captured 37.87% of total GeM order value in FY 2024-25—significantly surpassing the 25% mandate.
How MSE Preference Mechanics Work#
The process operates through sophisticated price-matching and contract-splitting.
- If L1 is an MSE, the full contract is awarded to them.
- If L1 is non-MSE, the top 5 MSEs quoting within L1+15% are allowed to match L1.
- Buyers then split quantities among MSEs, ensuring at least 25% of the contract goes to MSEs.
Udyam Registration serves as the gateway to MSE benefits. It is fully free and paperless.
Over 22.5 lakh sellers are registered on GeM, of which 10 lakh+ are verified MSEs—showing 40%+ growth since FY 2024-25 began.
MSE Competitive Advantages#
MSE sellers benefit from numerous advantages:
- Full exemption from tender participation fees
- EMD waivers
- No performance security for contracts below ₹25 lakh
- 50% relaxation in turnover requirements
Additionally, 358 reserved items are available exclusively to MSEs.
TReDS integration allows MSEs to receive 80–90% invoice value within 7–10 days, improving working capital.
Future Trajectory and Strategic Opportunities#
GeM plans to include infrastructure works contracts by Q4 2025 (current annual value ₹500 crore+).
Sustainability norms are being introduced:
- Carbon footprint disclosures
- ISO 14001 preference
- Plastic-free packaging requirements
- Green certifications offering 10–15% evaluation weightage
State-level adoption is increasing, with 88.8% of central procurement flowing through GeM.
Actionable Steps for 2025#
For MSE manufacturers:
Register on Udyam; verify Class I/II status; use TReDS for faster payments.
For aspirational block entrepreneurs:
Join Aakanksha through district coordinators; utilize certification and skill support.
For government buyers:
Clearly specify local content; ensure MSE preference; split quantities effectively to support smaller suppliers.
Conclusion#
Make in India and Vocal for Local have transformed government procurement into an engine of inclusive growth. With ₹14.77 lakh crore in total GMV, 22.5+ lakh registered sellers, and 37.87% of orders flowing to MSEs, the impact is undeniable. For entrepreneurs and businesses, this represents a genuine opportunity window to access India's government procurement market. It strengthens Atmanirbhar Bharat (self-reliant India). The transformation is accelerating, and 2025 is the year to act.
