Tender trouble for grocery traders

Small traders approach HC over Rs 500-crore turnover, Rs 16-crore EMD norms

Metro India News | Hyderabad 

A group of micro, small and medium grocery traders from Telangana has approached the Telangana High Court challenging the State government's latest tender notification for the supply of grocery items and cleaning materials to residential educational institutions and welfare hostels. The petitioners have alleged that the tender conditions are heavily tilted in favour of large corporate companies, leaving little scope for participation by small and medium businesses.

The writ petition has been filed by traders from Mahabubnagar, Nagarkurnool, Gadwal and Ranga Reddy districts. They have raised objections to what they describe as stringent eligibility norms prescribed in the tender process.

According to the petition, bidders are required to furnish an Earnest Money Deposit (EMD) of Rs.16 crore and demonstrate a turnover of Rs.500 crore during the previous three years. The petitioners argued that such requirements are beyond the reach of most MSMEs and effectively exclude thousands of small and medium traders from participating in the procurement process.

They contended that the conditions appear designed to benefit only a handful of large corporate entities. As a result, many small businesses that have traditionally supplied materials to government institutions would lose access to contracts, adversely affecting not only the traders but also the employees and families dependent on them for their livelihoods.

The petitioners further argued that centralising procurement on such a large scale could create a monopoly in the market. They expressed concern that concentrating supplies in the hands of a single agency would reduce competition and undermine opportunities for local businesses across districts.

Referring to previous procurement practices, the traders stated that tenders for the academic years 2024-25 and 2025-26 were conducted through District Purchase Committees. They said local suppliers participated in those tenders, supplied materials at competitive rates and completed the work without any major complaints or issues.

However, for the 2026-27 academic year, the government has introduced a new procurement model. Under the latest tender notification, a single agency is proposed to be selected for supplying grocery items and cleaning materials to more than 3,000 residential educational institutions and welfare hostels across Telangana.

The petitioners argued that the eligibility criteria imposed under the new system are unnecessary, discriminatory and violative of constitutional protections. They claimed the conditions infringe upon Article 14, which guarantees equality before law, and Article 19(1)(g), which guarantees the freedom to practise any profession or carry on any trade or business.

The traders have requested the Telangana High Court to cancel the tender notification issued on May 22, 2026, and grant a stay on its implementation until the matter is fully adjudicated. They have also urged the government to retain the district-level tender system followed in previous years and frame a new procurement policy that safeguards the participation of small and medium enterprises.