EMD on GeM bids: what it is, how it is set, exemptions, refund
EMD, the earnest money deposit, is the bid security a GeM buyer may ask for with your bid. This guide covers what it is, how the amount is set, who is exempt, forfeiture and refunds, as GeM's General Terms and Conditions (GTC), version 1.29 of 25 March 2026, describe them.
What EMD is
The GTC calls it bid security: a deposit or guarantee the buyer holds while your offer is considered, in case a bidder backs out, or wins and then fails to give the performance security. It earns no interest.
Accepted forms are an insurance surety bond, account payee demand draft, fixed deposit receipt, banker's cheque, bank guarantee (including an e-bank guarantee) from a commercial bank, or online payment, as the bid document allows.
Where to find it in the bid document
Look for the "EMD Detail" section after the main Bid Details table. It names an "Advisory Bank" and gives the "EMD Amount (In INR)". A group-wise bid lists a separate amount for each group, and some documents also show an "EMD Percentage(%)".
Bid documents also say "EMD & Performance security should be in favour of Beneficiary, wherever it is applicable" and name that beneficiary, the buyer's office. The "ePBG Detail" section that follows is the winner's later performance security, not the EMD.
How the amount is set
- No bid security is taken for bids or RAs with an estimated value under ₹5 lakh.
- Above that, the buyer states the exact amount when finalising the bid.
- GeM recommends 1% of the estimated value, and the buyer may choose anything from 0.5% to 5%. At 1%, a bid estimated at ₹20 lakh would ask for ₹20,000.
- The EMD must stay valid for 45 days beyond the bid validity, so check a guarantee's expiry date.
How it is submitted
For an instrument such as a bank guarantee or demand draft, upload a scanned copy with your online bid and deliver the original to the buyer within 5 working days of bid opening, or the bid may be treated as incomplete and rejected.
Who is exempt
| Seller | Condition in the GTC |
|---|---|
| Micro and small enterprises (MSEs) | Valid Udyam Registration; manufacturer of the offered product or provider of the offered service; claim it when bidding and upload proof |
| Startups | DPIIT recognition, a valid Startup Recognition Certificate uploaded, and turnover within DPIIT limits |
| KVIC, ACASH, WDO, Coir Board, TRIFED, Kendriya Bhandar | Exempt as listed |
| Vendor-assessed sellers | Valid Vendor Assessment report or exemption for the primary product or service |
| BIS licence holders | Valid BIS licence for the primary product category |
| Central and State PSUs | Exempt as listed |
| Sellers registered with an agency named in the bid | Upload that registration instead of bid security |
Bid documents add: "Under MSE category, only manufacturers for goods and Service Providers for Services are eligible for exemption from EMD. Traders are excluded from the purview of this Policy." The GTC bars taking EMD from exempt sellers through additional terms (ATC), but State Government buyers, state bodies, state PSUs and cooperatives may ask MSEs for EMD in the ATC, and State Government buyers may limit the exemption to their own state's MSEs. Read each bid's ATC.
When EMD is forfeited
The GTC lists three cases: you withdraw, modify or go back on your bid while it is valid; information or documents in your bid prove false, misleading or forged; or you win and do not furnish the performance security in time. GeM may also debar such a seller, for at least 3 months on a first offence.
When you get it back
- Unsuccessful bidders: within 15 days after the contract is awarded or the bid validity expires, whichever is earlier.
- Two-packet bids: if you are rejected at technical evaluation, within 15 days of that result.
- The winning bidder: within 15 days after the buyer receives your performance security (ePBG).
If a refund is late, write to the buyer, whose contact details are in the bid document, quoting the bid number and payment reference. The GTC makes the buyer responsible for bid-related grievances.
Doing this faster with Tender Radar
Tender Radar's "Extract" button reads the EMD amount (per group in group-wise bids), the EMD and ePBG percentages and the MSE and startup relaxation rows from the bid PDF inside your browser, with 15 other key fields, so you see which bids need a deposit before opening each document. It is free during its beta.
Frequently asked questions
Does every GeM bid ask for EMD?
No. GeM's GTC says no bid security is taken for bids or RAs with an estimated value under ₹5 lakh. Above that the buyer sets the amount, and exempt sellers do not pay it.
Are MSE traders exempt from EMD on GeM?
No. Under the MSE category only manufacturers of goods and providers of services are exempt, and bid documents state that traders are excluded.
How soon is EMD refunded?
For unsuccessful bidders, within 15 days of the contract award or the end of bid validity, whichever is earlier. For the winner, within 15 days of the buyer receiving the performance security.