Are MSEs exempt from EMD (Earnest Money Deposit) on GeM tenders?
Yes. Micro & Small Enterprises with a valid Udyam Registration are exempt from paying EMD on GeM tenders across most product and service categories. The exemption must be actively claimed in each bid — upload your Udyam certificate and tick the MSE benefit checkbox at bid submission.
What EMD is and why it matters
EMD (Earnest Money Deposit) is a security amount buyers ask bidders to deposit — typically 2–5% of the estimated tender value — as protection against a winning bidder backing out. On a ₹50 lakh tender, that's ₹1–₹2.5 lakh of working capital locked for the bid duration. For an MSE with tight cash flow, exemption is a game-changer.
Who's eligible
Micro Enterprises and Small Enterprises with a current Udyam Registration Certificate. Medium enterprises are not automatically exempt (though some buyers extend it voluntarily). Foreign bidders are never exempt.
How to claim on GeM
At bid submission: 1) upload your latest Udyam certificate under 'MSE Documents', 2) tick 'Claim EMD Exemption as MSE', 3) upload a self-certified declaration in the format GeM provides. Missing step 2 is the most common failure — the checkbox is easy to overlook and there's no warning.
When exemption doesn't apply
A small set of GeM categories — mostly defence, high-security items, and specialised technical goods — override the standard MSE exemption. The RFP will state this explicitly under 'Bid Security'. Read that section before you assume exemption.
Performance security
EMD exemption does not cover Performance Bank Guarantee (PBG), which winning bidders must submit after award. MSEs get a concession (typically 3% instead of 10%) but not full exemption.
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