India's Ministry of Information and Broadcasting has approved a significant amendment to the MIB Digital Advertisement Policy 2023 that opens the door for micro and small startups and MSME entities to participate in government digital advertising campaigns for the first time through a dedicated empanelment mechanism. The amendment, approved on May 8, 2026, modifies Part E of the existing policy and introduces what will be known as a Base Panel, a separate framework designed specifically to accommodate smaller digital agencies and startups that previously could not meet the eligibility thresholds set for the existing Category-I and Category-II agency structure. The Central Bureau of Communication issued an advisory on May 18, 2026, formally communicating the changes and confirming that both the original policy and the ministry's approval of the amendments had been issued together for transparency and clarity.

The development represents a meaningful shift in how the Indian government approaches its digital advertising ecosystem. Until now, the Digital Advertisement Policy 2023, which was originally notified on November 9, 2023, governed empanelment and engagement norms for government digital advertising across a wide range of platforms including websites, mobile applications, OTT platforms, digital audio platforms, social media platforms, and media agencies. The framework was structured around Category-I and Category-II agency classifications that, while appropriate for larger established players, effectively excluded the growing universe of smaller digital startups and MSME agencies whose scale and turnover placed them outside the qualifying criteria. The Base Panel amendment directly addresses that exclusion by creating a separate pathway with relaxed eligibility conditions tailored to the operational reality of smaller entities.

For India's startup ecosystem and MSME sector, both of which have experienced significant growth in digital marketing capabilities over the past several years, the amendment provides a concrete commercial opportunity that government policy had previously kept out of reach. The ability to execute government digital campaigns, including campaigns across digital and social media platforms, channels, and handles, gives eligible entities access to a category of client work that carries both revenue potential and reputational credibility. Government advertising mandates are among the most stable and visible forms of digital campaign work available in the Indian market, and opening them to smaller agencies acknowledges that innovation and execution quality in digital communication are no longer the exclusive domain of large, established firms.

What the Base Panel Is and Who Qualifies Under the New Amendment

The Base Panel created by the May 2026 amendment is a distinct empanelment category that will function alongside the existing Category-I and Category-II structures rather than replacing them. Under the revised provisions, the Central Bureau of Communication may, with the approval of the Director General or Principal Director General of CBC and through an appropriate Request for Proposal process, constitute the Base Panel from eligible micro and small startups and MSME entities. The panel is specifically intended for the execution of digital campaigns, and its scope explicitly includes campaigns across digital and social media platforms, channels, and handles, reflecting the growing centrality of social media to government public communication strategies in India.

The eligibility criteria established for Base Panel participation are carefully calibrated to target genuinely small operators rather than creating a backdoor for mid-sized agencies to access preferential rates under a more permissive framework. Entities seeking to qualify must have an average annual turnover of between two crore rupees and twenty crore rupees, a range that captures serious operating businesses with genuine market presence while excluding both the very smallest micro-operators and the mid-market agencies that already qualify under existing categories. Additionally, qualifying entities must hold either a valid DPIIT Startup recognition certificate or a Udyam registration certificate, both of which are official government-issued credentials that verify the entity's status as a recognized startup or MSME. The entity must also have been operational for at least one year, a minimum duration requirement that ensures applicants have demonstrated basic business viability before being entrusted with government campaign mandates.

The amendment also provides important flexibility to the CBC in setting the specific eligibility conditions for each empanelment round through the RFP process. Specifically, the RFP may prescribe relaxed eligibility conditions relating to prior experience and the scale of working relationships or networks with social media handles and channels, as decided by the DG or PrDG of CBC. This flexibility is significant because it acknowledges that smaller startups and MSMEs, by definition, will have shorter track records and smaller portfolio histories than established agencies, and that applying the same prior experience benchmarks to them would defeat the purpose of creating a separate pathway. By allowing the experience and network scale criteria to be adjusted through the RFP rather than fixing them rigidly in the policy text, the amendment gives CBC the practical room to design procurement processes that are genuinely accessible to the entities the Base Panel is intended to serve.

Pricing Structure, Empanelment Tenure, and What the Amendment Means for India's Digital Marketing Sector

One of the most practically important elements of the Base Panel amendment is its pricing mechanism, which sets the rates available to Base Panel entities at 75 percent of the L-1 rates discovered for Category-II agencies. The L-1 rate in government procurement terminology refers to the lowest price discovered through the competitive bidding process for a given category, making it the benchmark against which other rates are calibrated. Setting Base Panel rates at 75 percent of the Category-II L-1 rate means that government campaigns executed through Base Panel entities will cost less than equivalent campaigns through the existing category structure, a built-in pricing incentive that reflects both the smaller scale of Base Panel agencies and the government's interest in managing digital advertising expenditure efficiently.

The empanelment tenure for Base Panel entities will be co-terminus with the existing Category-I and Category-II agency empanelments, meaning that Base Panel members will serve for the same duration as agencies in the established categories rather than being empaneled on a different or shorter cycle. This alignment is important for operational predictability, as it means that Base Panel agencies and existing category agencies will be reviewed, renewed, and potentially replaced on the same schedule, creating a level of procedural consistency across the entire empanelment framework. For MSMEs and startups entering the government digital advertising market for the first time, the certainty of a defined tenure period aligned with the broader market provides a planning horizon against which they can make staffing, capability, and infrastructure investments.

The broader significance of the amendment extends well beyond the immediate commercial opportunity it creates for qualifying entities. India's government is one of the largest advertisers in the country, and its digital advertising expenditure has grown substantially as successive administrations have shifted communication budgets from traditional print and broadcast media toward digital platforms. By formally widening participation in that expenditure to include smaller startups and MSMEs, the MIB is making a statement about the maturity and diversity of India's digital marketing sector and about the government's willingness to engage with that diversity rather than concentrating its digital communication work within a small number of large incumbents. The amendment also aligns with broader government policy objectives around supporting India's startup ecosystem and formalizing MSME participation in public procurement, giving it a coherence within the wider policy landscape that strengthens its long-term durability.