Business & Defence Defence Defence Industry

In Fy22, The Defense Ministry’s Procurement From Msmes Via The Gem Portal Reaches An All-time High

May 2, 2022

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Image credit : Agni-Prime was successfully flight tested from Dr APJ Abdul Kalam Island in Odisha.(HT Photo/DRDO)

According to data released by former MSME Minister Nitin Gadkari in the Rajya Sabha in March 2020, the total MSME vendors providing to the Defence Public Sector Units (DPSUs) was 10,506, up from 8,643 in FY19 and 7,591 in FY18.
MAKE Projects have been essential in strengthening MSMEs’ involvement in defence, according to the government’s Make in India portal, with over 40% of project sanction orders handed to MSMEs and projects worth over Rs 1,000 crores allocated for MSMEs.

The Defence Ministry’s purchases of defense-related goods and services from micro, small, and medium-sized companies (MSMEs) and others on the government’s business-to-government (B2G) portal Government eMarketplace (GEM) increased by more than 250 percent from the previous year. Procurement orders through GeM achieved an all-time high of Rs 15,047.98 crore during FY22, according to a statement released by the ministry on Saturday.

“Through digitalisation, the GeM was launched in August 2016 to modernise the existing bidding process and provide better probity and openness to government procurement.” The Ministry of Defence has embraced the digital push and begun on this route with utmost resoluteness in the short time since its inception. Despite numerous hurdles on the ground, the ministry claims that the outcomes have been “amazing.”

According to data released by former MSME Minister Nitin Gadkari in the Rajya Sabha in March 2020, the total MSME vendors providing to the Defence Public Sector Units (DPSUs) was 10,506, up from 8,643 in FY19 and 7,591 in FY18. By December 2021, the total number of people had risen to 12,000 people. As a result, DPSUs’ MSMEs procurement value grew from Rs 4842.92 crore in FY19 to Rs 5463.82 crore in FY21.

Furthermore, as part of the Defense Acquisition Procedure (DAP) 2020, the government announced the introduction of ‘MAKE Projects,’ which will allow indigenous design and development of defence equipment with both government and industry support.

MAKE Projects have been essential in strengthening MSMEs’ involvement in defence, according to the government’s Make in India portal, with over 40% of project sanction orders handed to MSMEs and projects worth over Rs 1,000 crores allocated for MSMEs.

Meanwhile, GeM has 42.35 lakh sellers and roughly 60,000 government agencies from various ministries as customers, with over 1 crore transactions worth Rs 2.40 lakh crore already handled. Micro and small businesses made up 7.70 lakh of the total seller count, accounting for 56 percent of the order value on GeM.