Earnest Money Deposit (EMD), also called bid security, is an amount a bidder deposits to show the bid is serious. It is returned to unsuccessful bidders after the process. For a small business with several open bids, EMD can block a lot of working capital.
Who can be exempted
Under the government's Public Procurement Policy for Micro and Small Enterprises, eligible micro and small enterprises get benefits in government purchase. These include exemption from EMD and free tender documents in many tenders. Medium enterprises are generally not covered by these MSE benefits, and traders, distributors and sole agents are excluded from the policy.
Udyam or NSIC?
- Udyam is the basic MSME registration. Many tenders, including on GeM, accept Udyam-registered micro and small enterprises for these benefits.
- NSIC Single Point Registration is still asked for in some tenders and by some departments, often for the specific items registered.
The tender document always decides. Look for the clause on EMD exemption and check which certificate it names, and whether the exemption applies to the item or service you are quoting.
How to claim it
- Make sure your Udyam or NSIC certificate is valid and lists the relevant activity.
- Select the exemption option on the portal, where one is given.
- Upload the certificate in the place the tender asks for.
SoftTender is a private consultancy. We are not affiliated with GeM, CPPP, NSIC or any Government department. Registration on official portals such as GeM is free; we charge only for our assistance service. We do not guarantee that any tender will be awarded.