GeM tenders: EMD exemption and relaxations for MSEs and startups

Government procurement rules let Micro and Small Enterprises and recognised startups bid without paying Earnest Money Deposit (EMD, or bid security) in many tenders. On GeM this shows up in the bid document, and getting it wrong is one of the commonest reasons small firms lose out.

Who is usually exempt from EMD

• MSEs registered with Udyam, for the goods or services they're registered for. Traders generally don't get MSE procurement benefits; check the current policy for your category.
• Startups recognised by DPIIT under Startup India.
• The exemption must be claimed in the bid with valid certificates. The bid document states whether it applies; read the EMD section of each bid.

Turnover and experience relaxation is a separate question

• A GeM bid shows separate fields such as MSE Exemption for Years of Experience and Turnover and Startup Exemption for Years of Experience and Turnover. Each can be Yes or No.
• Being exempt from EMD does not mean the turnover or experience criteria are relaxed. Check those fields on their own.
• Where a bid states turnover or experience twice, the stricter figure is the one that binds.

What still applies

• Performance security (ePBG) after award is usually still required, at the percentage the bid states.
• Some bids ask for a bid securing declaration instead of EMD. Signing it has consequences if you withdraw.
• Keep your Udyam and DPIIT certificates current and matching the GeM profile, or the claim can be rejected.

Procurement rules and GeM terms change. Treat this as a checklist and confirm against the bid document and the current policy before you bid.