What is EMD?
Earnest Money Deposit is a security the bidder deposits so that it does not withdraw after bidding. The bid document states whether EMD is required and how much.
Who is usually exempt
How to claim it
Upload the valid Udyam certificate or DPIIT recognition certificate with the bid and make sure your GeM profile shows the MSE/startup status. Traders are generally not covered by the MSE exemption — the certificate must cover the item you are supplying.
Check every bid
Exemption rules depend on the bid. Mitra reads the EMD clause of each bid document and shows the amount and whether MSE/startup sellers are exempt.
How to read the EMD clause in a bid document
The bid document has an EMD section that states whether EMD is required, the amount, and how it is to be paid or submitted. Close to it you will find the line on MSE and startup exemption, and the ATC may add its own condition. Read all three together — the main bid, the EMD details and the ATC — before deciding whether you need to arrange money. If anything is unclear, use the bid's query or clarification option before the deadline rather than guessing.
To start from bids where this matters most, Mitra's /tenders/no-emd page lists live bids that ask for no EMD, and /tenders/mse-exempt lists bids that state an MSE exemption.
Bid-securing declaration
Some bids ask exempted sellers to sign a bid-securing declaration. By signing it, the bidder accepts that it can be barred from bidding for the period stated in the declaration if it withdraws its bid during validity, or does not accept the contract or submit the performance security after winning. Treat it as seriously as money: being exempt from EMD does not mean there is no consequence for backing out.
Common reasons an exemption claim is rejected
- ✓The Udyam certificate covers a different activity from the item or service in the bid
- ✓The enterprise has grown into the medium category, so the MSE exemption no longer applies
- ✓The certificate is uploaded, but the MSE or startup status is not updated in the GeM seller profile
- ✓The DPIIT recognition has lapsed, or the name on it does not match the seller's legal name on GeM
- ✓The seller is quoting as a trader for goods it does not manufacture, where the exemption covers only what the enterprise itself makes or provides
- ✓The ATC of that bid sets its own EMD condition, which the bidder did not read
EMD exemption and the rest of the bid
EMD exemption covers only the bid security. If you win, the performance security (ePBG) the bid asks for is a separate requirement, and MSE or startup status does not by itself waive it, so read the ePBG clause as well. Relaxation in turnover and experience is also separate: a bid can exempt you from EMD but still require you to meet turnover and experience, or the other way round. Check each condition on its own.
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Frequently asked questions
Is every MSE exempt from EMD on GeM?
MSEs registered for the item being bought are generally exempt, as the bid states. The Udyam registration must be valid and should cover the goods or services in the bid, and the MSE details must be updated in your GeM profile.
What document proves EMD exemption?
Usually the Udyam certificate for MSEs and the DPIIT recognition certificate for startups. Upload it where the bid asks for exemption proof and sign any bid-securing declaration the bid requires.
Is a medium enterprise exempt from EMD?
No. The EMD exemption for MSEs applies to micro and small enterprises, not medium enterprises.
Is a startup exempt from EMD without DPIIT recognition?
Generally no. The startup exemption is linked to DPIIT recognition, so a young company that is not recognised by DPIIT should expect to pay EMD unless it is exempt on another basis, such as being a registered micro or small enterprise, or the bid itself exempts it.
Is EMD returned if I do not win?
Yes. EMD of unsuccessful bidders is returned after the bid is decided, and the winning bidder's EMD is generally returned once it submits the performance security. The bid document and GeM's terms set out the process, so check them for the exact conditions.
Related guides
Rules change. Always confirm the details in the bid document and on gem.gov.in before you bid. · Updated 2026-11-02
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