Indian MSMEs are the backbone of its economy. MSMEs play a crucial role in the economy; however, over the years, the government has faced various challenges with accessing tenders. With the introduction of digital platforms that make government procurement more accessible, MSMEs are given many more, easier avenues to participate in government procurement. Digital platforms are designed to simplify the tendering process while providing businesses with new opportunities.
Digital platforms that make government procurement more readily available allow MSMEs easier opportunities to participate in government procurement. This guide will help you understand the main government tender filing platforms, which will assist MSMEs in growing and expanding their businesses.
Government e-Marketplace (GeM): A Digital Gateway
Launched by the Ministry of Commerce and Industry, GeM is an online platform that makes the procurement of goods and services by government departments easier. It was designed with the aim of enhancing transparency, efficiency, and inclusiveness in government procurement.
Why GeM is Important for MSMEs?
- Direct Orders: MSME can receive direct orders for your products, which are under ₹25,000. This is a great opportunity to create engagement and build trust with government buyers.
- Transparency: An Open bidding process allows all suppliers to receive equal opportunity to compete.
- EMD Exemption for MSMEs: MSMEs registered with the Udyam portal are exempt from Earnest Money Deposit (EMD), which means a cost-saving advantage for small businesses.
eProcurement System (eProcure): A Central Hub for Tenders
The eProcurement platform, managed by the National Informatics Centre (NIC), is the central portal for all government tenders in India. Whether you are bidding for a construction project or offering services, this platform centralizes everything.
Why eProcure is Important for MSMEs?
- Access to National and State Tenders - MSMEs can access tenders by central and state government departments by using eProcure, where they can secure bigger projects.
- Two-bid System - The two-bid system makes it clear that technical and financial evaluations must be done separately, allowing your business to compete based on merit rather than just price.
- Relaxations for MSMEs - There are relaxations in conditions for some things for the MSME, such as smaller performance security deposits and bid submission fees.
PM Gati Shakti: Infrastructure and Development Opportunities
PM Gati Shakti seeks to improve infrastructure and connectivity in the country through a multi-sector strategy across modes and sectors such as transportation, logistics, and construction, resulting in significant opportunities for MSMEs in these and related sectors.
How will PM Gati Shakti assist MSMEs?
- Co-ordinated Integrated Development of Infrastructure: The plans identify the development of roads, railways, ports and airports, and MSMEs can bid on related infrastructure development for construction, engineering, material, logistics, etc.
- Access to Large (Nation or Region) Projects: MSMEs coordinated in the Gati Shakti ecosystem can submit tenders for much larger national and regional infrastructure projects, with the potential for substantial business growth.
- Better business: Tendering alongside larger companies/contractors may assist msmes with accessing advanced technology, resources and networks.
TReDS: Empowering MSMEs with Financial Solutions
Trade Receivables Discounting System (TReDS) is a platform designed to help MSMEs deal with cash flow challenges. Through TReDS, MSMEs can avail financing against their invoices with banks and financial institutions at difficult times or when MSMEs need cash, overlook the pressures of cash flows and promote fostering business development.
TReDS game change for MSMEs
- Fast Financing - TReDS enables MSME to discount their invoices and receive payment immediately as opposed to waiting to be paid by large companies.
- Multiple Financiers - This platform is comprised of multiple financiers; therefore, MSMEs have the ability to get the best terms and conditions for the financing.
- Minimal or no risk - Unlike traditional finance mechanisms, where risk for the MSME is likely, with TReDS the credit risk is transferred to the financier, so the MSME does not have a risk and can promote business growth.
Udyam Registration: The Key to Government Schemes
Udyam Registration is the official recognition of MSME in India, which provides businesses with a unique identity and allows them to access various schemes and benefits from the government. this registration is important as it facilitates access to the government procurement sites GeM and TReDS.
Reasons for Importance of Udyam registration for MSMEs
- Access to Government Schemes and Benefits : Udyam registration allows a business to access government schemes that exist for MSMEs such as GeM, TReDS etc. It opens the door to financial benefits for MSMEs.
- Increased Credibility : Udyam Registration increases your business credibility, This will help the company take part in government tenders and easier for clients to trust your company.
- Simple Process : Udyam Registration is a simple process that includes basic documentation. Udyam Registration can be applied online.
Conclusion
In India, Government tenders are a tremendous growth opportunity for MSMEs. Platforms like GeM, eProcure, PM Gati Shakti and TReDS support visibility, comparability, different markets and the size of contracts. These private and public sector platforms also play a pivotal role in allowing MSMEs to optimize their operations, improve cash flow and help businesses with sources of finance through various schemes and programs meant for empowering small and medium business enterprises.
Having the right tool and support can alleviate the difficulties in navigating tenders and realize these growth opportunities. Tata nexarc provides methodologies that MSMEs can use to walk into and define Government and public tenders with significant financial capacity. Explore how Tata nexarc can help you expand your business.