Public Procurement Policy

The Public Procurement Policy for MSEs was notified under Section 11 of the Micro, Small and Medium Enterprises Development Act, 2006. The purpose of the Policy is to promote and develop Micro & Small Enterprises by supporting them in marketing the products manufactured and services rendered by them through public procurement from Central Ministries/Departments/CPSEs. For your business as an MSME, this means improved access to government supply-chains and a stronger potential market.

Key Features
Financial Assistance
Eligibility Criteria
Documents Required
Application Process for the Scheme

Key Features

Mandatory quota of procurement from MSEs: The Policy mandates that every Central Ministry, Department, and Central Public Sector Enterprise must set an annual target to procure at least 25% of its annual procurement from MSEs. Originally the target was 20% which was amended to 25% in 2018.
Sub-targets for MSEs owned by SC/ST and women entrepreneurs: Within the 25% target, the Policy requires a sub-target of 4% procurement from MSEs owned by SC/ST entrepreneurs and 3% from women-owned MSEs.
Reservation and preference for MSEs in specified items: A list of items is reserved for exclusive purchase from MSEs; the policy states that where a product is on that list, procurement should be from MSEs only.
Relaxation of prior experience and prior turnover norms for startups & MSEs: The Government has issued directions to relax criteria of prior turnover and prior experience for start-ups and MSEs in public procurement, subject to meeting quality/technical specifications.
Monitoring, grievance redressal and reporting mechanisms: The Policy mandates maintaining data on procurement from MSEs and providing grievance redressal for MSEs. Entities must report annual status.

Financial Assistance

Since this is a procurement-policy , there is no “grant or financial assistance” component per se. Rather, the benefit to MSMEs is access to procurement orders from government buyers.

Component	“Benefit” Provided	Detailed Explanation & Example
Procurement quota from MSEs	Minimum 25% of annual procurement by ministries/CPSEs must be from MSEs	Example: If a CPSE’s annual purchase budget is ₹1,000 crore, then at least ₹ 250 crore worth must be from MSE suppliers.
Sub-targets for SC/ST & women-owned MSEs	4% from SC/ST-owned + 3% from women-owned MSEs within the 25% quota	Example: From the ₹ 250 crore above, at least ₹ 10 crore must go to SC/ST MSEs and ₹ 7.5 crore to women-owned MSEs.
Relaxed procurement norms	MSEs/startups have fewer prior experience/turnover barriers in bids	Example: A startup MSE without long prior turnover may still bid for a government contract if quality standards are met.

Eligibility Criteria

Who can avail:

Micro and Small Enterprises registered under MSMED Act or as per up-to-date definitions and holding valid Udyam Registration.
MSEs must provide goods or services in the category invited for procurement by the buying entity; the supply must meet quality/technical specifications of the tender.
Women-owned, SC/ST-owned MSEs, startups fulfilling norms are eligible under respective sub-targets.

Who cannot avail:

Enterprises which do not register as MSEs or do not have valid registration.
Suppliers who fail to meet tender specifications or quality standards may lose preferential access.
Entities that do not provide required disclosures of ownership may not qualify for sub target benefits.
MSEs that fail to supply within payment norms or ignore rules may be de-listed or penalised.

Documents Required

Udyam Registration Certificate .
Valid PAN, GST registration , bank account details.
Declaration of ownership category if applicable.
Tender documents submitted including acknowledgement of reservation/preference claim.
Self-certification or proof of MSE’s goods/services category.
Past supply performance, technical specification compliance .

Application Process for the Scheme

Option 1: Apply with Bullit

Click here to start with guided support. Our team verifies eligibility, compiles documents, and handles application & follow-ups on your behalf. You can monitor progress while focusing on operations.
Recommended for: Lean teams. Designed to save you time and effort. Access expert help from start to finish.

Option 2: Direct Government / CPSE Participation Process

Ensure your enterprise is registered as an MSE and indicate ownership category .
Regularly monitor procurement portals and search for tenders where MSE participation is eligible under the policy.
When participating, submit necessary address, registration details and claims of MSE status; apply for reserved items where applicable.
Buying entity processes tender: If you qualify within the policy criteria (within L1+15% band etc) you may be eligible for preference under the policy.
Upon award, deliver supplies/services in accordance with contract and the policy targets; monitor payment timelines and report.

Option 3: Through Business/Industry Associations
MSEs may engage local industry associations, MSME clusters, or state nodal agencies for guidance on tender eligibility, bid preparation and leveraging preferential procurement.