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Public Procurement Policy for MSEs

Policy Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 states that the Central Government Ministries, Departments and Public Sector Undertakings shall procure minimum of 20 per cent of their annual value of goods or services from Micro and Small Enterprises. Click here to view and download the detailed guidelines of Public Procurement Policy.

The salient features of the Public Procurement Policy are summarized here:

  • Every Central Ministry or Department or Public Sector Undertaking (PSU) shall set an annual goal of procurement from MSEs from the financial year 2012-13 and onwards, with the objective of achieving an overall procurement of minimum of 20 per cent, of total annual purchases of products produced and services rendered by MSEs in a period of three years. After a period of three years i.e. from 1st April 2015, overall procurement goal of minimum of 20 per cent shall be made mandatory.

  • Out of 20% target of annual procurement from MSEs, a sub-target of 4% (i.e., 20% out of 20%) will be earmarked for procurement from MSEs owned by SC/ST entrepreneurs.

  • Every Central Government Ministry/Department/PSU will report the goals set with respect to procurement to be met from MSEs and the achievement made thereto in their Annual Reports.

  • In tender, participating MSEs quoting price within price band of L1+15 per cent shall also be allowed to supply a portion of requirement by bringing down their price to L1 price in a situation where L1 price is from someone other than a MSE and such MSE shall be allowed to supply up to 20 per cent of total tendered value.

  • The Central Ministry/Department/PSU will continue to procure 358 items from MSEs, which have been reserved for exclusive purchase from them.

  • Given their unique nature, defence armament imports will not be included in computing the 20% goal for M/o Defence. In addition, Defence Equipments like weapon systems, missiles, etc. will remain out of purview of such policy of reservation.

  • In addition, a ‘Grievance Cell’ would be set up in the Ministry of MSME for redressing the grievances of MSEs in Government procurement.


The key services provided by Office of DC-MSME to achieve objectives as outlined in Public Procurement Policy 2012 include:

Services    Description
Business Matchmaking Database Click here to access the online matchmaking database for finding business partners.
Marketing events DC-MSME also organize several marketing events such as trade fairs, exhibitions etc where you can display your products and meet new business partners. Click here to know details.
Tenders and Subcontracting notifications Click here to search, view or post tenders and subcontracting notifications 
Training and capacity building The office of DC-MSME and its field institutes organize and facilitate several training and capacity building programs to both MSMEs and large enterprises to meet objectives of Public Procurement Policy 2012. Click here to know details.
Advisory and consultancy Please visit any of the MSME-DIs for advisory and consultancy related support. Click here to know the location of your nearest DI. 
Capacity Grading Database Click here to view the technical capacity grading of MSMEs
Grievance cell Please post your suggestions and grievances with respect to any aspect of policy Click here.
Reporting and monitoring If you are a large enterprise, please make use of the online facility (Click here) to report procurement related targets to the Office of DC-MSME.
Reports and Resources Click here to download the several useful codes, guides and best practices for both MSMEs and large enterprises 

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