In public procurement, new businesses often struggle with a common challenge: you need experience to win tenders, but you need an order to gain experience.
With the integration of Startup India and the Government e-Marketplace (GeM), this barrier has significantly reduced. If you hold a valid DPIIT Recognition Certificate, you are not just another seller - you receive benefits that even large corporations cannot access.
This guide explains how Startup India-registered companies can unlock these advantages and win government contracts in 2025.
1. The “Big Three” Exemptions: Removing Entry Barriers#
Under GFR Rule 173(i) and public procurement policies, GeM provides automatic exemptions to DPIIT-recognized startups for three major criteria: turnover, experience, and EMD.
A. Prior Turnover Exemption#
The Issue: Many tenders demand a high average annual turnover (e.g., 50 lakhs for last three years).
Benefit for Startups: DPIIT-recognized startups receive a full exemption from turnover requirements. You can bid even with zero turnover, as long as you meet technical specifications.
B. Prior Experience Exemption#
The Issue: Tenders often require years of experience or similar completed projects.
Benefit for Startups: Experience requirements are waived. Even newly registered startup can participate in large contracts if the technical criteria are met.
C. EMD (Earnest Money Deposit) Waiver#
The Issue: EMD charges (1–5% of tender value) can block working capital until the bid is evaluated.
Benefit for Startups: MSE’s are fully exempt from EMD. Simply claim the exemption during bid submission and upload the DPIIT certificate.
Note: Startups must still submit a Performance Bank Guarantee (ePBG) if they win the contract.
2. The GeM Startup Runway (Version 2.0)#
For highly innovative products that do not fit into existing GeM categories, the Startup Runway offers:
- Product Showcase: Display innovative products even without an existing GeM category.
- Direct Visibility: Dedicated store access for buyers seeking innovative solutions.
- Trial Orders: Buyers can place trial orders, and after receiving feedback from three departments, the product becomes eligible for wider procurement.
3. How to Activate Startup/MSE Benefits on GeM (Step-by-Step)#
Step 1: Acquire DPIIT Recognition#
Ensure your DPIIT number and certificate are valid.
Step 2: Link Your Startup Certificate on GeM#
- Log in to your seller account
- Go to My Account > My Profile
- Open the “Startup” section
- Select “Registered with Startup India” and enter your DPIIT number and DPIIT-linked mobile number
GeM will validate your details automatically.
Step 3: Claim Exemptions During Bidding#
- Choose “Yes” against EMD Exemption option
- Upload your DPIIT certificate
- Select “Startup India” as the reason
4. A Hidden Advantage: Make in India & L1+ Margin Preference#
Startups often qualify as Class-I Local Suppliers because they manufacture or develop products domestically.
Purchase Preference Under PPP-MII:
If your quoted price is within 20% of L1 and the L1 bidder is not a local supplier, the buyer may offer you the chance to match the L1 price. If you accept, you may receive 50% or even 100% of the order (Depending upon the terms mentioned in the bid).
5. Common Mistakes to Avoid#
- Expired DPIIT Certificates: Ensure your recognition remains valid.
- Technical Non-Compliance: Financial exemptions do not cover compliance with technical specifications or mandatory certifications.
- Ignoring Custom Bids: Many startups win through custom bids in sectors with lower competition.
Conclusion: The Best Time for Startups on GeM is Now#
GeM crossed ₹5 lakh crore in procurement value in FY 2024–25, with a rising preference for agile, innovation-driven companies. With EMD waivers, experience exemptions, and the Startup Runway, the platform offers unprecedented opportunities.
All that is required is a strong strategy and proper onboarding.
If you need guidance with GeM registration, category creation, tender participation, or exemption setup, Bidz365 can help.
Contact Bidz365 for expert Startup onboarding:
+91 9999119365 | www.bidz365.com
Disclaimer: All eligibility conditions, exemptions, and procurement preferences mentioned in this article differ from bid to bid. Buyers may impose additional requirements, and certain exemptions may not apply to all tender formats or categories. Always review the complete bid document before participation.
