Government departments and Public Sector Enterprises (PSUs) purchase thousands of crores worth of products and services every year. For small businesses, becoming a government supplier can open up an important market beyond traditional private customers.
To improve market access for entrepreneurs from Scheduled Caste (SC) and Scheduled Tribe (ST) communities, the Government of India has introduced specific procurement targets and support programmes for eligible micro and small enterprises (MSEs).
Recently, the Ministry of MSME held a round-table discussion with 30 Central Public Sector Enterprises (CPSEs) to improve procurement from SC/ST-owned MSEs.
In this article, we explain the 4% government procurement target, eligibility requirements, National SC-ST Hub support and how eligible entrepreneurs can find government tenders.
The Government of India introduced the Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 to improve market access for small businesses.
Under the policy, Central Government Ministries, Departments and CPSEs have an annual procurement target of at least 25% from MSEs.
The policy includes specific sub-targets:
| Procurement target | Percentage |
|---|---|
| Overall procurement from MSEs | 25% |
| SC/ST-owned MSEs | 4% |
| Women-owned MSEs | 3% |
The SC/ST procurement target is part of the overall MSE procurement framework. It does not mean that 4% of every individual tender is reserved for SC/ST businesses.
The policy also provides certain purchase preferences to eligible MSEs, subject to tender conditions.
Official reference: Department of Expenditure – Manual for Procurement of Goods, 2024.
To qualify as an SC/ST-owned MSE under the relevant procurement policy, the enterprise must satisfy the ownership requirements.
The enterprise must also qualify as a micro or small enterprise under the applicable MSME classification.
Businesses should maintain valid community certificates and ownership documents to establish eligibility when required.
Reference: PIB – Clarification on SC/ST-owned MSEs.
The National Scheduled Caste and Scheduled Tribe Hub (NSSH) was launched by the Ministry of MSME in 2016.
Its objective is to help SC/ST entrepreneurs establish, develop and expand their businesses, particularly by connecting them with government procurement opportunities.
Some important areas of support include:
Entrepreneurs can explore the National SC-ST Hub official portal for scheme information and support.
Apart from procurement opportunities, eligible enterprises can explore several support programmes.
1. Special Credit Linked Capital Subsidy Scheme (SCLCSS)
Eligible SC/ST-owned MSEs can receive a 25% capital subsidy, subject to scheme guidelines, on eligible plant, machinery and equipment financed through institutional credit. The maximum subsidy is ₹25 lakh.
2. Single Point Registration Scheme (SPRS)
Through NSIC registration, eligible MSEs can access government procurement benefits such as free tender sets and exemption from Earnest Money Deposit (EMD), subject to applicable conditions.
3. Special Marketing Assistance Scheme (SMAS)
This programme supports eligible SC/ST enterprises in participating in exhibitions, trade fairs, marketing activities and vendor development programmes.
4. Vendor Development Programmes
These programmes help entrepreneurs interact with government buyers and CPSEs, understand vendor registration procedures and identify potential supply opportunities.
Read the official MSME scheme factsheet for details.
Eligible entrepreneurs can follow these practical steps to explore government procurement opportunities.
Step 1: Obtain Udyam Registration
Register your eligible micro or small enterprise through the official Udyam Registration Portal.
Step 2: Prepare ownership documents
Keep your SC/ST certificate, PAN, business registration documents and ownership records ready.
Step 3: Register on GeM
Create a seller account on the Government e-Marketplace (GeM). This platform allows eligible businesses to offer products and services to government buyers.
Step 4: Explore NSIC registration
Check whether your business qualifies for the NSIC Single Point Registration Scheme.
Step 5: Find suitable tenders
Search for relevant opportunities through:
Step 6: Participate in tenders
Read the technical specifications, eligibility conditions, delivery requirements and payment terms before submitting your quotation or bid.
Remember, registration does not guarantee a government order. Product quality, competitive pricing, documentation and timely delivery remain important.
On 5 November 2026, the Ministry of MSME organised a round-table discussion with 30 CPSEs to improve procurement from SC/ST-owned MSEs. The announcement was published by PIB on 10 November 2026.
Participating organisations included BHEL, BEL, NTPC, Airports Authority of India, BEML and Coal India.
The discussions focused on:
According to the Ministry, public procurement from SC/ST MSEs increased more than 36-fold in FY 2025–26 compared with the level at the inception of the National SC-ST Hub scheme.
This is an encouraging development for eligible entrepreneurs looking to enter the government supply market.
Official announcement: PIB – CPSE Round-table Discussion on SC/ST MSE Procurement, 10 November 2026.
Before participating in government procurement, small business owners should:
Do not quote an extremely low price simply to win a tender. A government order should be commercially profitable after accounting for all expenses.
1. What is the 4% government procurement target for SC/ST MSMEs?
It is the annual procurement sub-target for SC/ST-owned MSEs under the Public Procurement Policy, within the overall 25% procurement target from MSEs.
2. Can SC/ST entrepreneurs sell products through GeM?
Yes. Eligible businesses can register as sellers on GeM and participate in suitable procurement opportunities, subject to platform and tender requirements.
3. Is GeM registration compulsory for government tenders?
No. GeM is an important procurement platform, but government departments also publish tenders through other procurement portals.
4. What is the National SC-ST Hub?
It is a Ministry of MSME initiative that supports SC/ST entrepreneurs through procurement access, vendor development, marketing and capacity-building programmes.
5. Does SC/ST ownership guarantee a government contract?
No. Procurement targets and support measures improve access, but businesses must still satisfy the relevant tender conditions and compete according to applicable procurement rules.
Government procurement can provide an important growth opportunity for eligible SC/ST-owned micro and small enterprises.
However, entrepreneurs should not depend only on government subsidies or procurement targets. Building reliable products, maintaining quality, understanding tender requirements and offering competitive prices are equally important.
With the support of GeM, NSIC and the National SC-ST Hub, eligible businesses can explore new buyers and gradually develop government procurement as another sales channel.
For small entrepreneurs, the opportunity is not simply to register on a government portal. It is to build a business capable of supplying government buyers consistently.
Want to explore government procurement further?
Useful free business tools:
Explore the BusinessZindagi MSME Business Tools and Calculators for business costing, project planning and financial calculations.
You can also use the BusinessZindagi Project Cost and Business Tools to prepare for business expansion and new supply opportunities.
Readers should verify the latest scheme guidelines, procurement conditions and eligibility requirements through the relevant official portals before applying.
AI tools assisted in researching and preparing this article. The content has been reviewed and edited for clarity and practical usefulness.
This article is for informational and educational purposes only. Government procurement policies, eligibility conditions and scheme benefits are subject to official guidelines and amendments. Participation does not guarantee a government contract, subsidy or financial assistance. Readers should verify current requirements with the relevant government authorities before applying.
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