GeM Portal for MSMEs: Benefits, Purchase Preference & EMD Exemption

By GeMSignal · Updated · 6 min read

MSMEs are the backbone of GeM's seller base, and government policy deliberately tilts the field in their favour. Here is what those benefits actually are and how to make sure you get them.

The policy behind MSME benefits

The Public Procurement Policy for Micro and Small Enterprises Order, 2012 sets an annual target for central ministries, departments and CPSEs to procure at least 25% of their goods and services from MSEs, with sub-targets for MSEs owned by SC/ST entrepreneurs and by women. GeM is one of the main ways buyers meet this target.

Key benefits for MSEs on GeM

  • EMD exemption — eligible MSEs are generally exempt from paying Earnest Money Deposit on bids.
  • Purchase preference — an MSE quoting within a defined band of the L1 price can be allowed to supply a share of the order by matching L1.
  • MSE-reserved bids — some bids are restricted to or prioritise MSE participation.
  • Relaxations — buyers may relax prior experience and turnover criteria for MSEs and recognised startups.

How to make sure GeM recognises you as an MSE

Benefits are applied based on what is in your GeM profile. Get your free Udyam registration from udyamregistration.gov.in and make sure your Udyam number is correctly added and verified in your GeM seller profile. If it is missing or mismatched, you may be treated as a non-MSE in bids.

Reading a bid for MSE terms

Every bid document states whether MSE purchase preference applies, whether EMD exemption is allowed, and whether experience/turnover relaxations are given. Check these fields before deciding to bid — they change your eligibility and your cost of participating.

The MSME bottleneck: time

Most MSMEs have one or two people handling sales, accounts and operations. Watching GeM all day isn't realistic. GeMSignal can flag bids where MSE preference applies in your category so you spend your time on bids you can actually win.

Note: GeMSignal is a private service and is not affiliated with the Government e-Marketplace. Rules, thresholds and fees change — always verify on the official portal at gem.gov.in.

Frequently Asked Questions

Do MSMEs have to pay EMD on GeM?
Eligible MSEs registered under Udyam (or NSIC) are generally exempt from EMD, but always confirm the exemption clause in the specific bid document.
Is Udyam registration required for GeM?
It is not mandatory to register on GeM, but you need a valid Udyam registration in your GeM profile to claim MSE benefits such as EMD exemption and purchase preference.

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