Deemed OEM Approval —
Get Recognized as an OEM
for Government Supply Chains
Original Equipment Manufacturer (OEM) status is the single most powerful credential in government and defence procurement — it unlocks exclusive tender categories, preferential pricing, direct supply contracts, and protection from intermediaries undercutting your business. "Deemed OEM" status allows manufacturers who meet defined criteria to be treated as OEMs in procurement even where direct OEM participation has been restricted or where they are the authorised Indian representative of a foreign OEM. TaxClue prepares and submits your Deemed OEM application, organises documentation, and manages the approval process end to end.
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What Is a "Deemed OEM" — and Why Does It Unlock Government Contracts?
An Original Equipment Manufacturer (OEM) is the company that designs, engineers, and manufactures a product. In government and defence procurement, OEM status carries significant weight — tenders often restrict participation to OEMs or their authorised dealers, preferential price margins are given to OEMs, and Make in India policies reserve entire categories for Indian OEMs.
"Deemed OEM" is the formal status granted — by the government procurement authority, a PSU, a platform like GeM, or a tender authority — to an entity that meets defined manufacturing, authorisation, or capability criteria that qualifies them to be treated as an OEM for procurement purposes. This may apply to:
- Indian Manufacturers with Contracted ProductionA company that designs and sells products under its own brand but uses contract manufacturers for production — still qualifies as OEM if it holds the design ownership and quality responsibility
- Authorised Indian Representatives (AIR) of Foreign OEMsAn Indian company formally authorised by a foreign OEM to participate in Indian government tenders on its behalf — carrying OEM pricing, support commitments, and warranty obligations
- GeM OEM SellersOn GeM, the manufacturer who lists a product as an OEM can authorise dealers to resell it; only the OEM-registered seller can set the base price for the product on GeM
- Deemed OEM under DAP 2020Under India's Defence Acquisition Procedure 2020, specific provisions allow Indian vendors with significant indigenous content and manufacturing capability to be treated as OEMs in defence capital procurement
- PSU Vendor ClassificationMajor PSUs — ONGC, BHEL, NTPC, SAIL, HAL — maintain approved OEM lists; Deemed OEM approval here means being on the primary approved list rather than the less-preferred authorised dealer list
Why OEM Status vs Authorised Dealer Matters: In most government tenders, OEMs receive a 15–20% price preference over non-OEM bidders. In many defence tenders, only OEMs can bid — dealers cannot. On GeM, only the OEM can set the product's base catalogue price. In PSU procurement, OEMs are on the Primary Approved Vendor List — dealers are on the Secondary list, which is often not even invited for large orders.
3 Key Procurement Contexts Where Deemed OEM Status Is Required
Deemed OEM approval is not a single registration — it is context-specific. The process, criteria, and authority differ depending on which procurement system you are targeting.
Defence Acquisition Procedure (DAP 2020)
India's primary framework for defence capital procurement. DAP 2020 introduced the "Atmanirbhar Bharat" categories where Deemed OEM status is granted to Indian manufacturers meeting Indigenous Content (IC) thresholds. Categories IC — IDDM (Indigenously Designed, Developed and Manufactured) and IC — Make in India are restricted to Indian OEMs with verified local manufacturing. Dealers of foreign OEMs require formal Authorised Indian Representative (AIR) agreements that meet MoD requirements for participation.
GeM OEM Seller Registration & Authorised Reseller
On GeM, the "OEM" is the manufacturer who originally lists a product and sets its catalogue specifications and base price. OEM sellers on GeM can authorise dealers as "Resellers" — but the OEM retains pricing control and is the primary point of contact for government buyers seeking direct manufacturer supply. For branded products (electronics, IT hardware, equipment), GeM requires the OEM to be the primary registered entity — a dealer cannot list a product as its own on GeM without OEM authorisation.
PSU Approved OEM Lists & Tender OEM Eligibility
Major PSUs — ONGC, BHEL, NTPC, IOCL, SAIL, HAL, Railways, DRDO — maintain their own Approved OEM Lists (AOL). Being on the Primary AOL as an OEM (vs. the Secondary approved dealer list) determines whether you are invited for large capital purchase tenders, get priority in restricted bids, and qualify for Annual Rate Contracts (ARCs). Government tenders issued via CPPP and state procurement portals similarly classify bidders as OEM or authorised dealer — the eligibility criteria differ substantially between the two categories.
Which Type of Deemed OEM Applies to Your Business?
TaxClue's first step is always to identify the correct OEM classification for your business model and target buyer. Applying under the wrong category delays approval and may result in rejection.
Indian Manufacturer — Direct OEM
Your company designs, develops, and manufactures (wholly or through contract manufacturers under your IP and quality control) a product sold under your own brand. You are the original equipment manufacturer. Deemed OEM approval confirms and formalises this status with the specific buyer or assessment authority.
Defence DAP GeM OEM Seller PSU Primary AOL All Tenders ✅ Strongest OEM position — Make in India IC requirements most easily metAuthorised Indian Representative (AIR) of Foreign OEM
Your company is formally appointed by a foreign OEM as its Authorised Indian Representative with exclusive or primary rights to represent the OEM in Indian government procurement. The AIR agreement must meet MoD or PSU-specific requirements — it must include technical support obligations, warranty commitments, spare parts supply guarantees, and pricing authority. A generic distributorship agreement does not qualify.
Defence DAP PSU Empanelment Restricted Tenders ⚠️ AIR agreement must be specifically drafted to meet procurement authority requirementsGeM OEM — Manufacturer Listing & Reseller Control
On GeM, OEM registration means being the manufacturer who lists a product with its own brand, specifications, and pricing. Once registered as OEM, you can authorise dealers as Resellers. Critical for branded product manufacturers — if a dealer lists your product before you register as OEM, they can capture your government buyer market and set prices you cannot control. Registering as OEM first gives you pricing sovereignty.
GeM OEM Seller Reseller Network Control ✅ Prevents dealer undercutting — only OEM controls base price on GeMMake in India & IDDM — OEM Preference Claim
Under the Public Procurement (Preference to Make in India) Order and DAP 2020's Atmanirbhar categories, Indian manufacturers with verified domestic content percentage receive mandatory price preference and in some tenders exclusive eligibility. Deemed OEM approval under these categories requires BIS certification, DPIIT startup recognition, or Udyam registration as applicable, plus documented Indigenous Content calculation prepared according to the prescribed methodology.
Defence IDDM/IC Make in India Tenders ✅ 15–20% price preference over non-qualifying biddersDeemed OEM Under DAP 2020 — India's Defence Acquisition Procedure
India's Defence Acquisition Procedure 2020 (DAP 2020) represents the most structured and demanding OEM framework in Indian government procurement. It categorises capital procurement into specific categories based on Indigenous Content (IC) and the source of design — with the highest-priority categories reserved exclusively for Indian OEMs with genuine local manufacturing capability.
Understanding which DAP category your product or system fits into is the starting point. TaxClue maps your technology, Indigenous Content percentage, and manufacturing capability to the correct DAP category and guides the complete Deemed OEM qualification process.
Key Point — AIR Agreements for Foreign OEMs: If your company represents a foreign OEM in India, the Authorised Indian Representative agreement must be specifically structured for MoD compliance. A standard distributorship agreement will be rejected. TaxClue reviews or drafts AIR agreements that meet DAP 2020 requirements including technical support SLAs, warranty terms, pricing authority, and export control compliance.
DAP 2020 Procurement Categories — OEM Requirements
Category IC-IDDM — Indigenously Designed, Developed & Manufactured
Highest priority. Indian OEM must be the designer and manufacturer with ≥50% Indigenous Content. Cannot be a dealer or AIR of a foreign OEM. Entire category reserved for Indian OEMs. Strongest price preference.
Indian OEM Only · ≥50% ICCategory IC — Make in India (Indian Manufacturer)
Open to Indian OEMs manufacturing in India. Foreign OEM systems assembled or manufactured in India by an Indian entity with ≥50% domestic content qualify. AIR of foreign OEMs may participate under specific conditions.
Indian Manufacturing · ≥50% ICCategory IC — Buy (Indian)
Products with ≥60% domestic content. Open to Indian OEMs and qualified AIRs of foreign OEMs. Foreign OEM participation requires MoD-compliant AIR agreement with Indian value addition commitment.
≥60% IC · AIR EligibleCategory Buy (Global — Manufacture in India)
Foreign OEMs with commitment to manufacture in India after initial import. Requires Technology Transfer (ToT) agreements and phased indigenisation plan. Indian JV partner may carry Deemed OEM status.
FDI / JV · ToT RequiredCategory Buy (Global)
Import-based procurement for technology not available in India. AIR of foreign OEM eligible. No IC requirement but subject to offset obligations for large contracts above ₹2,000 crore.
Import · AIR Required · OffsetsTaxClue's Deemed OEM Application & Approval Process
Deemed OEM approval is not a single form — it is a structured qualification process that requires the right documentation, correct classification, and careful presentation of manufacturing and technical capability. TaxClue manages the complete process.
Documents Typically Required
Step-by-Step Process
OEM Category Mapping
TaxClue identifies the correct Deemed OEM category for your business — Indian manufacturer, AIR of foreign OEM, GeM OEM, PSU empanelment, or DAP procurement category — based on your product, manufacturing model, and target buyer.
Day 1Eligibility & Gap Assessment
Detailed review of your current registrations, certifications, manufacturing capability documentation, and Indigenous Content percentage. Gap list prepared — missing certifications, IC calculation needed, AIR agreement deficiencies.
Day 1–3AIR Agreement Review / IC Calculation
For AIR applications — the OEM authorisation agreement is reviewed against buyer requirements and redrafted or supplemented where needed. For Indian OEMs — Indigenous Content is calculated from Bill of Materials using prescribed methodology.
Day 3–10OEM Profile & Capability Statement Prepared
Comprehensive OEM profile drafted — manufacturing facility details, technical capability, quality systems, IC documentation, customer track record, financial summary — formatted to the specific buyer's requirements.
Day 7–14Application Filed with Buyer / Authority
Deemed OEM application submitted to the relevant authority — GeM portal, PSU procurement department, MoD/DDP, or tender authority. TaxClue tracks status and responds to information requests, queries, and site visit scheduling.
Day 14 onwardApproval & Empanelment Confirmed
OEM status confirmed by the procurement authority. For GeM — account upgraded to OEM status and reseller authorisation framework set up. For PSUs — added to Primary Approved OEM List. For Defence — AIR or IC certification issued.
Varies by authorityOEM vs Authorised Dealer in Government Procurement — A Clear Comparison
| Procurement Factor | Deemed OEM Status | Authorised Dealer / Distributor |
|---|---|---|
| Tender Eligibility | Eligible for OEM-restricted tenders | Excluded from OEM-only tenders |
| Make in India Price Preference | 15–20% price preference in bids | No Make in India preference available |
| Defence IDDM / IC Categories | Eligible for highest-priority categories | Excluded from IC-IDDM and Make in India categories |
| GeM Pricing Control | Sets base product price on GeM | Cannot modify base price — dependent on OEM |
| PSU Approved Vendor List Position | Primary AOL — first invited for orders | Secondary AOL — invited only if OEM unavailable |
| AMC & Spares Contracts | Direct AMC contracts as OEM | AMC often not awarded to dealers |
| Margin in Supply Chain | Full manufacturer margin — no intermediary | Dealer margin only — OEM takes larger share |
| Brand Protection | Prevents unauthorised dealers listing your product | Cannot prevent other dealers undercutting |
| Government Credit & Finance | Easier access to MSME OEM-specific credit schemes | Standard SME credit only |
Deemed OEM Approval Across All Key Sectors
Defence & Aerospace
Aircraft components, electronics, ammunition, vehicles, communication systems
DAP 2020 IDDMElectronics & IT Hardware
Servers, networking gear, computers, storage, surveillance systems
GeM OEM · BISIndustrial Machinery
Capital equipment, pumps, compressors, machine tools, process plant
PSU Primary AOLAutomotive Components
Parts for defence vehicles, railway rolling stock, government fleet
Make in India ICMedical Devices
Diagnostic equipment, hospital devices, healthcare instruments
CDSCO · GeM OEMPower & Energy
Transformers, switchgear, solar equipment, grid infrastructure
BIS · PSU AOLTelecom Equipment
Wireless systems, communication towers, network infrastructure
TEC · GeM OEMScientific Instruments
Lab equipment, measurement systems, testing apparatus for DRDO / DST
DAP · DSIR❓ Frequently Asked Questions
Assembly of imported components can qualify for OEM status in some contexts but not others. The critical determining factor is the Indigenous Content (IC) percentage — the value of domestically sourced components and processes as a percentage of total cost. Under DAP 2020 and Make in India procurement orders, a minimum IC threshold (typically 50–60%) must be met to qualify for OEM preference. If your assembly process uses primarily imported sub-assemblies with minimal local value addition, you may not meet the IC threshold. However, if you hold the product design, are responsible for quality, and sell under your brand, you may still qualify for GeM OEM registration and some PSU OEM listings. TaxClue calculates your IC percentage from your Bill of Materials before we begin the application — if the threshold is not met, we advise on how to increase local content to qualify before applying, rather than submitting an application that will be rejected.
A generic distributorship or agency agreement is not sufficient for AIR qualification in defence or PSU procurement. A procurement-compliant AIR agreement must include: (1) an explicit grant of authority to represent the OEM in government/defence tenders in India; (2) the OEM's commitment to provide warranty support, spares, and technical assistance directly to the government buyer for the contract duration; (3) pricing authority — the AIR must be authorised to commit to prices without going back to the OEM for every bid; (4) export control compliance confirmation — especially for defence and dual-use goods under ITAR, EAR, or Indian SCOMET regulations; (5) exclusivity terms if the tender authority requires it; (6) duration of agreement covering the contract period and warranty period. TaxClue reviews your existing agreement against these requirements and advises the foreign OEM on the specific clauses that need to be added or modified. We do not draft export-controlled defence agreements without understanding the export licence situation, so this review is essential before the AIR agreement is finalised.
Yes — and in some cases, a DPIIT-recognised startup has advantages that older companies do not. Under GeM's "Startup" and "Innovative Products" categories, startups can be listed as OEMs with relaxed financial track record requirements. Under DAP 2020's iDEX (Innovations for Defence Excellence) scheme, startups and MSMEs are specifically encouraged to develop and supply defence technology as OEMs — the IC and track record requirements are structured differently for iDEX participants. For PSU OEM empanelment and standard government tenders, financial track record and past supply experience requirements may be harder to meet for newly incorporated entities. TaxClue assesses the specific requirements of your target buyer and identifies the pathway that is accessible for a company at your stage — there is almost always an entry point, even for new companies, as long as the manufacturing capability and product quality are genuine.
Indigenous Content (IC) is the percentage of a product's total cost that represents domestically manufactured or produced components, sub-assemblies, software, and manufacturing services — as opposed to imported content. The calculation methodology is prescribed under the relevant procurement policy (DAP 2020 defines it for defence; the Public Procurement Order defines it for civilian goods). The basic formula is: IC% = (Total Cost minus Cost of Imported Content) divided by Total Cost, multiplied by 100. "Imported content" includes all components, sub-assemblies, materials, and processes that originate outside India regardless of whether they were procured from an Indian distributor. Labour, design, engineering, testing, and manufacturing overhead performed in India count as domestic. TaxClue prepares the IC calculation from your Bill of Materials in the format prescribed by the specific procurement authority — the calculation must be supported by invoices or procurement records and is subject to audit. A common mistake is excluding Indian-procured imported components from the IC denominator — they must be included if they were originally imported.
Timeline and validity vary significantly by the approval type. GeM OEM registration is the fastest — typically 5–15 working days once documents are in order. PSU OEM empanelment varies by PSU: ONGC and BHEL processes can take 2–4 months including site inspections. DAP 2020 AIR and IC certification processes depend on the specific tender timelines and can range from 3 weeks for a well-prepared application to several months for complex defence systems requiring MoD review. Validity: GeM OEM status is ongoing as long as the product is listed and the seller account is active. PSU OEM approvals are typically valid for 1–3 years with re-validation required. Defence AIR agreements are valid for the specific contract period and must be renewed for each new procurement. TaxClue maintains a renewal calendar and initiates re-validation processes well before expiry to ensure continuous OEM status without gaps.
⚠️ Common Reasons Deemed OEM Applications Fail
These avoidable errors are the most common causes of rejection or classification as "Authorised Dealer" rather than OEM — costing businesses their price preference and tender eligibility:
- Submitting a standard distributorship agreement as an AIR agreement — procurement authorities have seen thousands of these and immediately recognise agreements that do not include the mandatory OEM support commitments
- Incorrect Indigenous Content calculation — not using the prescribed methodology, or incorrectly treating Indian-procured imported components as domestic content, leading to inflated IC percentages that are rejected on audit
- Applying as OEM when the company's legal structure is that of a trading company — procurement authorities cross-check factory registration, GST filing category (manufacturing vs trading), and plant & machinery declarations
- Missing product-specific regulatory certifications — a company claiming to be an OEM of electrical equipment without BIS certification, or medical devices without CDSCO registration, will be downgraded to dealer status
- Design ownership not documented — claiming OEM status requires proof of design ownership (patent, design registration, or proprietary technical documentation); undocumented "in-house design" claims are not accepted
- GeM OEM application filed after a dealer has already listed the product — once a dealer has listed and made sales, overriding their listing as OEM requires a dispute process; apply as OEM before your distributors get there
- Foreign OEM authorisation letter not covering the specific product category in the tender — AIR agreements that are broad in scope but do not explicitly cover the products being tendered are treated as insufficient authorisation
Trusted by 10,000+ Clients Across India
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"We manufacture electronic sub-assemblies for defence applications. TaxClue mapped our products to the correct DAP 2020 category, calculated our Indigenous Content at 67%, and prepared the OEM capability profile for the DDP registration process. We got IC-IDDM category clearance in 11 weeks — the first time we've been able to bid directly in this category."
"We're the Indian representative of a European industrial equipment OEM. Our existing distributorship agreement was inadequate for ONGC tender participation. TaxClue identified the exact clauses missing — warranty commitment, spares guarantee, pricing authority — and worked with our European principal to add them. ONGC accepted the revised AIR agreement. First purchase order: ₹2.4 crore."
"Three of our dealers had listed our IT hardware brand on GeM before us and were selling below our price. TaxClue registered us as the OEM on GeM, established our base prices, and set up an authorised reseller framework. We now control pricing across all GeM listings of our brand. Should have done this the moment GeM launched."
"We'd been on BHEL's Secondary Approved Vendor List for 5 years as a dealer. TaxClue helped us apply for OEM status on the Primary AOL by documenting our in-house manufacturing capability — which had existed all along but was never formally presented. Moved to the Primary list. Our first direct BHEL order as OEM was ₹1.1 crore."
"As a DPIIT startup making AI-based security systems, we were unsure whether we qualified as OEM for government contracts. TaxClue identified the iDEX pathway under DAP 2020 specifically for startups, calculated our IC at 73%, and submitted the capability profile. The process was far less intimidating than we feared — and we now supply to three Army units directly."
"TaxClue managed our complete Deemed OEM qualification across four PSUs simultaneously — ONGC, IOCL, HPCL, and Railways. Same product, four different empanelment processes. They handled the documentation, site visits, and follow-up for all four. All four approved within 5 months. The efficiency was remarkable."
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Learn More →OEM Status Is the Difference Between Being Invited to Bid — and Being Excluded
The largest government orders in India go to OEMs — not dealers, not traders, not distributors. If your manufacturing capability qualifies you as an OEM and you are not formally recognised as one, you are leaving the most valuable government contracts on the table. TaxClue gets you recognised.
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