How to Get a Contractor License in India
A contractor license is a government-issued registration certifying your eligibility to execute construction work, especially for government projects and tenders. It is issued by the Public Works Department (PWD) or equivalent state authority.
When Is a License Required?
- Bidding on government tenders (CPWD, state PWD, railways)
- Government construction projects above Rs 5 lakh
- Establishing credibility for large private projects
- Obtaining building permits and approvals
Not required for: Small private residential work, sub-contracting under a licensed contractor, or labour-only contracts (which need a separate CLRA license).
License Classes
| Class | Work Value | Typical Projects |
|---|---|---|
| Class A | Rs 5 crore+ | Highways, dams, large infrastructure |
| Class B | Rs 1-5 crore | Medium buildings, roads, bridges |
| Class C | Rs 25 lakh - 1 crore | Small commercial, residential complexes |
| Class D | Rs 5-25 lakh | Individual houses, small repairs |
| Class E | Up to Rs 5 lakh | Minor works, maintenance |
Exact limits vary by state. Some states use Class I/II/III classification.
Required Documents
All classes: Aadhaar, PAN, address proof, bank statements (6 months), GST registration, firm registration, passport photos.
Class A/B/C additionally: Engineering degree/diploma, experience certificates, CA-certified financial statements, solvency certificate from bank, EMD (Rs 50,000 - Rs 5 lakh), work completion certificates, equipment list, and 3-year ITR.
Registration Process
- Determine your class based on financial capacity and experience. New contractors typically start at Class D/E.
- Visit state PWD portal — CPWD (cpwd.gov.in), Maharashtra (mahapwd.com), UP (uppwd.gov.in), Karnataka (kpwd.gov.in), etc.
- Submit online application with personal details, firm details, and experience.
- Upload documents in PDF format.
- Pay fees — Class E: Rs 500-2,000, Class D: Rs 2,000-5,000, Class C: Rs 5,000-15,000, Class B: Rs 15,000-30,000, Class A: Rs 30,000-1,00,000.
- Verification — document review and possible site inspection for higher classes.
- License issued — digital certificate on portal, physical copy available.
Timeline: 30-90 days depending on class and state.
Upgrading Your License Class
To move from Class D to C or higher:
- Complete 2-3 projects in your current class
- Collect work completion certificates
- Demonstrate increased financial capacity
- Submit upgrade application with additional fees and EMD
Contractor License vs Labour License
| Parameter | Contractor License | Labour License (CLRA) |
|---|---|---|
| Purpose | Execute construction work | Supply 20+ contract workers |
| Issued by | PWD | Labour Department |
| Required for | Government tenders | Engaging 20+ workers |
| Fees | Rs 500 - Rs 1 lakh | Rs 50-500 |
Tips for New Contractors
- Start with Class D/E and build experience
- Get GST registration (mandatory above Rs 20 lakh turnover)
- Register on government procurement portals (GeM, eProcure)
- Get MSME registration for tender benefits
- Maintain proper project documentation using the Yojo app — track workers, expenses, and daily progress across all sites
- Keep strong banking relationships for solvency certificates
Construction Management Expert
Senior Construction Consultant at Yojo
10+ years of experience
Reviewed on 11 April 2026
About Yojo Team
Construction management expert with 10+ years of experience helping Indian contractors build better businesses. Specialized in digital transformation for construction sites.
