Article · policy page

MSME Public Procurement Policy, 25% Purchase Mandate & Price Preference

Ministry of Micro, Small & Medium Enterprises · msme.gov.in Free Intermediate India

The official source for the procurement quotas and price preferences that tilt government buying toward small firms. Combined with DPIIT relaxations, this is the structural advantage most founders don't know they can claim.

  • Every central ministry/PSU must procure at least 25% from Micro & Small Enterprises (mandatory since 1 April 2015).
  • Sub-targets reserve 4% for SC/ST-owned and 3% for women-owned MSEs within that 25%.
  • An MSE quoting within L1+15% can match L1 and supply up to 25% of the tendered value.
  • 358 items are reserved for exclusive procurement from MSEs, register on Udyam to qualify.
Open on msme.gov.in ↗

It answers 2 questions

  1. Are there quotas or preferences that tilt tenders toward small players like me?
  2. Government pays slowly, how do I survive the cash-flow gap?

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