EMD (Earnest Money Deposit) is a bid security the tender authority holds during evaluation. It is refunded to unsuccessful bidders and adjusted against the performance security of the winning bidder. Failing to submit EMD in the correct format is the #1 reason bids get rejected.
How much is EMD?
Typically 2-5% of the estimated tender value, capped at ₹1 crore for very large tenders. Small tenders may specify a flat figure (₹5,000 / ₹25,000). Always check the NIT — never assume.
Accepted formats
- Demand Draft (DD) — most common. Made out to a specific payee named in the NIT (e.g. "Director, AIIMS New Delhi").
- Bank Guarantee (BG) — issued by a scheduled commercial bank, valid for the tender period + 60-90 days.
- Fixed Deposit Receipt (FDR) — pledged in the name of the tender authority.
- e-Payment via CPP Portal — allowed for CPPP-hosted tenders since 2019. Refund is faster.
When is EMD refunded?
- Unsuccessful technical bidder: refund initiated within 30 days of technical evaluation
- Successful bidder: EMD converts to performance security (usually 5-10% of contract value) or is refunded when performance security is deposited separately
- Bid withdrawn after deadline: EMD is forfeited
- Winner refuses to accept the order: EMD is forfeited
MSME exemptions
MSMEs registered on the Udyam Registration Portal are exempt from EMD under the Public Procurement Policy for MSMEs, 2012 (with exceptions for tenders that explicitly override). To claim the exemption, upload your Udyam certificate + a declaration in the format specified in the NIT.