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EMD Full Form: What is EMD in Tender (and on GeM)?
What is EMD?
EMD, or Earnest Money Deposit, is a security deposit that a buyer asks every bidder to pay when submitting a bid. It protects the buyer from bidders who quote, win and then walk away. Because every bidder has money at stake, only serious bidders take part. In tenders it is also called bid security.
You’ll see EMD in government tenders and GeM bids, auctions (property, vehicles, scrap) and property deals. This guide focuses on tenders and GeM.
How much EMD is required?
For central government tenders, GFR Rule 170 sets EMD at ordinarily 2% to 5% of the estimated value. The buying department picks the exact figure and prints it in the bid document. Some tenders state a fixed rupee amount instead.
EMD calculator
EMD = estimated tender value × EMD %
EMD %
EMD payable
₹50,000
Use the amount in your bid document if it differs from this estimate.
| Estimated value | At 2% | At 3% | At 5% |
|---|---|---|---|
| ₹5,00,000 | ₹10,000 | ₹15,000 | ₹25,000 |
| ₹25,00,000 | ₹50,000 | ₹75,000 | ₹1,25,000 |
| ₹1 crore | ₹2,00,000 | ₹3,00,000 | ₹5,00,000 |
How to pay EMD
Under GFR Rule 170, bid security can be an account-payee demand draft, fixed deposit receipt, banker’s cheque, bank guarantee from a commercial bank, or online payment the buyer accepts. It should normally stay valid for 45 days beyond the bid validity period.
On GeM
- Note the EMD amount, advisory bank and beneficiary details in the bid document.
- Pay by the allowed method: online transfer or an electronic bank guarantee (e-BG).
- Upload the payment proof or e-BG details while submitting your bid.
- Exempt? Select Yes for EMD exemption and upload your Udyam or DPIIT certificate.
Who is exempt from EMD?
| Who | Proof | Note |
|---|---|---|
| Micro & Small Enterprises | Udyam certificate | Medium enterprises not covered |
| DPIIT-recognised startups | DPIIT certificate | Must be valid on bid date |
| Registered with the CPO or buying ministry | Registration certificate | That buyer’s tenders |
Exemption is not automatic. Claim it in the bid and upload the certificate. Some tenders accept a signed Bid Security Declaration instead of money; break it and you can be suspended from that buyer’s tenders for a period, often 12 months.
Is EMD refundable?
You lost
Returned after award
On GeM, credited back once the winner is finalised.
You won (L1)
Held until ePBG
Returned or adjusted after performance security.
Forfeited if
You withdraw during validity, refuse the contract, skip the ePBG, or gave false documents.
EMD not refunded yet? Check the bid status, then raise a ticket or call 1800-419-3436 with the bid number and payment proof.
EMD vs ePBG vs security deposit vs tender fee
| EMD | ePBG / performance security | Security deposit | Tender fee | |
|---|---|---|---|---|
| Who pays | Every bidder (unless exempt) | Winner only | Winner only | Every bidder, if charged |
| When | With the bid | After award | After award (works) | Buying the tender |
| Size | 2–5% | % of contract value | % of contract value | Small fixed |
| Refundable | Yes | Yes, after contract | Yes, after completion | No |
EMD – FAQ
What is the full form of EMD?
Earnest Money Deposit. In tenders it is also called bid security.
How much is EMD in a government tender?
Usually 2% to 5% of the estimated value under GFR Rule 170. The exact amount is in the bid document.
How do I calculate EMD?
Multiply the estimated value by the EMD %. For example, 2% of ₹25 lakh is ₹50,000.
Is EMD refundable?
Yes. It’s returned to unsuccessful bidders after award, and to the winner after the performance security.
Do MSMEs pay EMD on GeM?
Micro and small enterprises with Udyam are exempt when they claim it and upload the certificate. Medium enterprises usually aren’t.
When is EMD forfeited?
If you withdraw during validity, refuse the contract after winning, or don’t submit performance security.
What is EMD in an auction?
The deposit you pay to be allowed to bid. It’s adjusted if you win and refunded if you don’t.
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