State government issued a government order (GO) providing various concessions to startups in the Micro Small and Medium Enterprises (MSME) sector for procurement.

According to the GO, the startups will be exempted from payment of earnest money deposit, condition of prior turnover, condition of prior experience, and waiver of tender cost. "The concessions will be provided to the registered startups for public procurement by a procuring entity including government departments for procurements that are below Rs 20 lakh to improve the startup ecosystem in the state", said V Arun Roy, Secretary, MSME Department, in the GO.

Following demands from various startups, officials of Tamil Nadu Startup and Innovation Mission (TANSIM) stated that startups in the state are technically capable of providing solutions to various governance and other issues faced by the government departments in implementing various schemes and providing procurement preference to startups will also help them scale-up rapidly and create enormous employment in the state.

The officials had also recommended that as the startups struggle in the early stages due to lack of market for their products the patronage of the state government can solve their marketing problems and purchase by the government will be a recognition to them. However, the startups face various issues as government departments and Public Sector Undertakings (PSUs) imposes various restrictions on them but neighboring states like Kerala, Telangana, and Karnataka have provided necessary relaxations for their development.

Taking a clue from the neighbouring states, the MSME department, in the order, said that the concessions will be provided if the startups are registered on the portal of the Department of Promotion of Industry and Internal Trade (DPIIT) or TANSIM and if the startups are registered in Tamil Nadu.