MSME EMD Exemption — The Complete Guide for 2026

For Micro, Small, and Medium Enterprises (MSMEs), the Earnest Money Deposit (EMD) can be a significant hurdle when applying for multiple government tenders. Fortunately, the Government of India provides EMD exemptions to registered MSMEs to promote their participation in public procurement.

What is EMD Exemption?

When you submit a bid for a government tender, you are usually required to deposit a certain amount of money as a guarantee. If you are an MSME registered under Udyam, you can request an exemption from paying this deposit by submitting an EMD Exemption Request Declaration.

Steps to Claim EMD Exemption

• Register your business: Ensure your business is registered on the Udyam portal and you have a valid Udyam Registration Certificate.
• Check Tender Eligibility: Not all tenders offer MSME exemptions. Read the tender document (NIT) carefully to verify if EMD exemption is permitted.
• Prepare the Exemption Letter: Draft a formal letter requesting the exemption, citing your Udyam registration number and the relevant government procurement policy clauses.
• Upload the Documents: During the bid submission on GEM or CPPP, upload your Udyam certificate and the exemption declaration in the designated fee exemption section.

How BidSarathi Helps

Instead of manually drafting these letters and worrying about exact compliance wording, BidSarathi automatically generates the MSME EMD Exemption Request Declaration tailored to the specific tender you are applying for. It also auto-fills the fee exemption sections on the government portals, saving you time and preventing rejection due to technicalities.