Quick Tip : An MSME exemption in GeM applies on a per-tender basis. The tender document decides which exemption is allowed for the specific bid. The main categories are EMD exemption for Udyam-registered MSEs, relaxed turnover and past-experience criteria. The L1 plus fifteen percent purchase preference under the Public Procurement Policy. Make in India exemptions on Class 1 and Class 2 local supplier status are separate and depend on the tender's own provisions.
Every MSME looking at an MSME exemption in GeM eventually asks which exemption actually applies to the specific bid they are evaluating. The answer sits inside the tender document. This article walks through the main exemption categories, how each is claimed and where ClearBid Tender Intelligence surfaces tenders early enough for the seller to read the exemption clauses against the business's own eligibility.
The tenders themselves are published on the Government e-Marketplace portal. Each tender document carries its own clauses on which exemptions apply. The seller claims the applicable exemption explicitly inside the bid response rather than relying on the Udyam linkage alone.
Sellers who want the wider MSME benefits context can revisit the GeM registration benefits for MSME walkthrough that lists the specific advantages Udyam linkage unlocks across tenders.
For sellers evaluating the MSME exemption in GeM alongside the Make in India framework, the MII and EMD exemption walkthrough describes how the two frameworks interact on a tender that applies both.
EMD Exemption for Udyam-Registered MSEs
The emd exemption for msme sits inside the GFR 2017 framework. An Office Memorandum of the Department of Expenditure, Ministry of Finance amended GFR 2017 to prescribe an EMD exemption for Micro and Small Enterprises registered under Udyam. The exemption applies where the tender specifies it. Sellers who see how the exemption is claimed know that the claim has to be explicit.
The seller claims the exemption by attaching the Udyam Registration Certificate and an exemption declaration inside the GeM bid. A bid that simply skips the deposit without claiming the exemption is treated as non-compliant, the same way a bid that pays the wrong amount would be. This MSME exemption in GeM applies only to Micro and Small Enterprises; Medium Enterprises are not covered by the EMD exemption, even where they hold Udyam registration. The MSME exemption in GeM therefore has a classification floor built into it: Micro and Small qualify; Medium does not.
Key point: The emd exemption for msme is per-tender and per-claim. The Udyam certificate alone does not waive the deposit; the seller has to attach the exemption declaration explicitly. Medium Enterprises do not receive the EMD exemption even with Udyam registration. This specific MSME exemption in GeM is one of the clearest examples of a per-tender rather than universal rule.
Relaxed Turnover and Past Experience Criteria
Many GeM tenders carry relaxed turnover and past-experience criteria for MSMEs. These relaxations sit inside the tender's own pre-qualification clauses rather than as a universal rule. Sellers who confirm eligibility before a bid know that the relaxation is tender-specific and has to be read on each tender being evaluated.
- Turnover thresholds: some tenders waive or reduce the turnover floor for MSE bidders, where the tender clause allows it
- Past-experience years: some tenders accept a shorter past-performance window from MSE bidders
- Similar-work count: the number of similar past contracts required may be lower for MSEs on specific tenders
- Factory certification: some tenders substitute equivalent certifications for an MSE where the tender permits
The relaxation applies only where the tender document carries the clause. A tender that does not mention MSE relaxation applies the standard pre-qualification criteria to every bidder regardless of Udyam linkage. Sellers should read the pre-qualification section on each tender to confirm whether the relaxation is on offer. The MSME exemption in GeM on turnover and experience is the one sellers most often assume is automatic, when the tender clause is actually what decides it.
The L1 Plus Fifteen Percent Purchase Preference
The Public Procurement Policy carries a purchase preference for Micro and Small Enterprises on central-government procurement. Under the policy, Central buyers must source at least 25 percent of annual purchases from MSEs. Within that framework, an MSE whose quoted price is within L1 plus fifteen percent may be awarded the order on matching the L1 price. Sellers who see the specific MSE benefits walkthrough recognise this as the practical mechanism behind the preference.
- 25 percent procurement target: Central buyers must source at least 25 percent of annual purchases from MSEs
- L1 plus 15 percent band: MSEs within L1 plus 15 percent may win the award on matching the L1 price, where the tender applies the preference
- Micro and Small only: the preference applies to Micro and Small Enterprises, not to Medium Enterprises
- Tender-specific application: whether the preference applies to a specific tender is published inside the tender document
This MSME exemption in GeM runs as a price-preference clause rather than a document-level exemption. The seller does not need to attach an additional declaration beyond the Udyam certificate, since the preference is applied by the evaluator at the financial opening stage. The tender document decides whether the preference applies to the specific bid being evaluated. Sellers who want the MSME exemption in GeM purchase-preference benefit on a tender should confirm the clause before quoting a price, since the preference affects how the final award decision is made.
Class 1 and Class 2 Local Supplier Status Under Make in India
The Public Procurement (Preference to Make in India) order applies a separate preference framework for local suppliers. Suppliers are classified as Class 1 or Class 2 local suppliers based on the local content percentage. The specific local content thresholds plus the preference mechanics for each class are published inside the tender document for the tender in question. Sellers who see how MII interacts with EMD exemption know that the two frameworks sit side by side rather than overlapping.
- Class 1 local supplier in GeM: higher local content classification; the tender document publishes the specific threshold and the preference the seller receives
- Class 2 local supplier in GeM: the tender document publishes the applicable local content range and the preference, where the preference applies
- Non-local supplier: suppliers below the Class 2 threshold on local content; the tender document publishes whether they are eligible to bid
- Make in India certificate: the self-declaration or certification the tender names, where applicable, that the seller attaches to claim local supplier status
Make in India preferences and MSE preferences are distinct frameworks. A seller can be a Class 1 supplier in GeM under Make in India without being an MSE. An MSE can be a non-local supplier if the local content does not meet the threshold the tender names. The seller reads both frameworks against the specific tender rather than treating one as a substitute for the other. The MSME exemption in GeM is one lens on a specific tender; the Make in India classification is another. The two apply independently.
Sellers whose business is actively claiming a Class 1 supplier in GeM status should confirm the self-declaration or certification format the specific tender names. Format mismatches on the Make in India declaration carry the same treatment as any other document mismatch at technical evaluation. Combining the MSE Udyam declaration with the Make in India self-declaration where both apply is routine on central-government tenders that run under both frameworks. The MSME exemption in GeM on EMD and the Make in India preference on local content can both be claimed on the same bid where the tender permits each.
Sellers evaluating an MSME exemption in GeM claim should also plan the attachment order inside the bid upload. The Udyam certificate and the EMD exemption declaration usually sit alongside the identity documents, while the Make in India self-declaration sits with the technical response. Keeping the attachments in the sequence the tender's price bid format and technical bid format expect reduces the review time at the evaluator's end and avoids a document-order query.
What Does Not Apply Automatically
Key point: No MSME exemption in GeM is automatic across all tenders. Every MSME exemption in GeM is per-tender and depends on the tender document carrying the specific clause. The Udyam certificate is the base document that establishes MSE status; the exemption claim on each tender is a separate step. Every MSME exemption in GeM therefore has to be read on the specific tender being evaluated.
- EMD waiver on every tender: the EMD exemption applies only where the tender specifies MSE exemption is allowed
- Automatic purchase preference: the L1 plus 15 percent preference applies only where the tender document carries the clause
- Relaxed criteria without reading the tender: turnover and experience relaxations apply only where the tender carries the specific MSE clause
- Make in India benefits for all MSEs: the Class 1 and Class 2 classification is on local content, not on MSE status
How ClearBid Tender Intelligence Helps Read the Exemption Clauses
Reading the MSME exemption in GeM clauses on every tender manually takes time. ClearBid Tender Intelligence delivers an 8 a.m. email alert of tenders matched to the business's keywords. The seller sees matched tenders early enough to read the pre-qualification and EMD clauses against the business's own eligibility and Udyam status.
The service scope stays within the keyword-matched alert. Tender Intelligence does not match on turnover, experience or MSE status itself. It does not claim the exemption on the seller's behalf. The seller reads each matched tender's exemption clauses and files the claim with the bid. Sellers who take up ClearBid GeM Onboarding receive Tender Intelligence complimentary for three months, which covers the initial calibration period during which the MSME exemption in GeM pattern across the business's tender category becomes clearer.
Register on ClearBid today and get Tender Intelligence that surfaces matched tenders at 8 a.m. so the MSME exemption clauses can be read against the business's own eligibility.
Frequently Asked Questions About MSME Exemption in GeM
Q1. Is the MSME exemption in GeM automatic for every Udyam-registered seller?
No. The MSME exemption in GeM is per-tender and depends on the tender document carrying the specific clause. The Udyam certificate establishes MSE status but does not by itself waive any requirement on a bid. The seller reads each tender's pre-qualification and EMD clauses and claims the applicable exemption explicitly inside the bid response.
Q2. Does the emd exemption for msme apply to Medium Enterprises as well?
The emd exemption for msme under the amended GFR 2017 framework applies to Micro and Small Enterprises registered under Udyam. Medium Enterprises are not covered by the EMD exemption even where they hold Udyam registration. Sellers with Medium classification should plan the EMD payment for every tender regardless of their Udyam status.
Q3. Who qualifies as a class 1 supplier in gem?
A class 1 supplier in gem is a supplier whose local content meets the higher threshold under the Public Procurement (Preference to Make in India) order. The specific local content percentage and the preference the Class 1 supplier receives on a particular tender are published inside the tender document. Sellers claim the Class 1 status by attaching the self-declaration or certification the tender names.
Q4. What does local supplier in gem mean for a bidder on a specific tender?
A local supplier in gem is one whose local content meets the thresholds the tender document publishes under the Make in India framework. The seller is classified as Class 1 or Class 2 based on the local content percentage. The tender decides whether the preference applies on that specific bid, and the seller attaches the required Make in India certificate or declaration to claim the classification.
Q5. Can I combine EMD exemption with the purchase preference on the same tender?
Yes. The two are separate exemptions and can both apply on the same tender where the tender document allows each. The seller claims the emd exemption for msme by attaching the Udyam certificate and the exemption declaration, and the L1 plus 15 percent purchase preference is applied by the evaluator at the financial opening stage based on the Udyam-linked MSE status.
Q6. How does ClearBid help me spot the MSME exemption clauses on tenders?
ClearBid Tender Intelligence delivers an 8 a.m. email alert of tenders matched to the business's keywords. The seller then reads each matched tender's exemption clauses against the business's eligibility. The service scope is the keyword-matched alert; it does not match on MSE status or claim exemptions. GeM Onboarding customers receive Tender Intelligence complimentary for three months.
