Quick recap: what EMD is for
EMD (Earnest Money Deposit) is a bid security. It protects the buyer if a seller withdraws or changes its offer during bid validity, or refuses the contract after being declared the winner. It is not a fee: if you do none of those things, it comes back to you. MSEs registered for the item and DPIIT-recognised startups are usually exempt, as the bid states.
When EMD is returned
- ✓Unsuccessful sellers: after the bid is finalised — the contract is awarded or the bid is cancelled
- ✓Technically disqualified sellers: once their disqualification is final
- ✓Successful seller: typically after the performance security (ePBG) required by the contract is submitted
- ✓Bid cancelled by the buyer: EMD of all participating sellers is due back
How the refund happens depends on how you paid
Bids allow EMD in the forms they specify, such as an online payment or a bank guarantee. A cash-type deposit is refunded to the account the payment came from or the account the bid process records; a bank guarantee is released by the buyer so that your bank can cancel it. Note in your records which form you used for each bid — the follow-up is different for each.
When EMD can be forfeited
- ✓Withdrawing or modifying the offer during bid validity
- ✓Refusing to accept the contract after being declared L1
- ✓Failing to submit the performance security within the time allowed
- ✓Other grounds stated in the bid and GeM's terms
If your EMD refund is delayed
- ✓Check the bid status on GeM: is it actually finalised or still under evaluation?
- ✓Write to the buyer quoting the bid number, EMD amount, form of payment and date
- ✓For a bank guarantee, ask the buyer for the release letter so your bank can cancel it and free your limit
- ✓If the buyer does not respond, use GeM's grievance/incident mechanism for the bid
Reduce the cash you lock in EMD
If you are an MSE, keep your Udyam registration valid and make sure it covers the items you bid for, so you can claim exemption where the bid allows it. Startups should keep DPIIT recognition current. And track open bids so you know exactly which EMDs and guarantees are still outstanding.
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Frequently asked questions
When will I get my EMD back on GeM?
Unsuccessful sellers get it back after the bid is finalised or cancelled. The winning seller usually gets it back after submitting the required performance security.
Why is my EMD not refunded yet?
Often the bid is not yet finalised, or the buyer has not processed the release. Check the bid status and write to the buyer with the bid number and payment details; escalate through GeM's grievance mechanism if needed.
Can EMD be forfeited on GeM?
Yes — for example if you withdraw or change your offer within bid validity, refuse the contract after being declared L1, or fail to submit performance security in time.
Is EMD refunded with interest?
Generally no interest is paid on EMD. It is refunded in the amount deposited, as per the bid terms.
Do I have to apply for an EMD refund?
The refund follows from the bid being finalised, but you may need to follow up with the buyer, especially to get a bank guarantee released.
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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