Commerce Dashboard
MSME
The number of registered MSMEs grew to 2.5 million units in 2020 due to launch of Udyog Aadhaar Memorandum policy.

Indian MSME Industry Analysis

    Last updated on Dec, 3 2021

According to the provisions of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two classes i.e., Manufacturing Enterprises and Service Enterprises.

The enterprises are further categorized based on investment in equipment and annual turnover.

Criteria

Manufacturing

Service

Turnover

Investment

Turnover

Investment

Micro

Rs. 5 crore

(US$ 0.6 million)

Less than Rs. 25 lakh (US$ 0.03 million)

Rs. 5 crore

(US$ 0.6 million)

Less than

Rs. 10 lakh

(US$ 0.01 million)

Small

Rs. 50 crore

(US$ 6.8 million)

More than Rs. 25 lakh (US$ 0.03 million) but less than Rs. 5 crore (US$ 0.6 million)

Rs. 50 crore

(US$ 6.8 million)

More than Rs. 10 lakh (US$ 0.01 million) but less than Rs. 2 crore (US$ 0.3 million)

Medium

Rs. 250 crore (US$ 34 million)

More than Rs. 5 crore (US$ 0.6 million), but less than Rs. 10 crore (US$ 1.4 million)

Rs. 250 crore (US$ 34 million)

More than Rs. 2 crore

(US$ 0.3 million) but does not exceed Rs. 5 crore

(US$ 0.6 million)

 

At present, India has approximately 6.3 crore MSMEs. As per the MSME Ministry data, as of October 21, 2021, the Udyam Registration portal registered 53,33,323 MSMEs, replacing the former process of filing for an Udyog Aadhaar Memorandum (UAM). Registered micro-enterprises stood at ~47 lakh (94%), followed by small enterprises at 2.7 lakh (5%) and midsized enterprises at 40,062 (1%). As of October 2021, under the top five state-wise Udyam registrations, Maharashtra recorded maximum number of  registrations with 11.29 lakh units, followed by Tamil Nadu (5.75), Gujarat (4.57), Rajasthan (4.39) and Uttar Pradesh (4.10). New online system of MSME/Udyam Registration launched by the Union MSME Ministry, w.e.f. July 01, 2020, successfully registered >1.1 million MSMEs until November 2020. Aero India 2021 resulted in orders worth Rs. 203 crore (US$ 27.76 million) for 45 MSMEs that participated in the event. In June 2021, the Ministry of Micro, Small and Medium Enterprises extended the validity of Udyog Aadhaar Memorandum from March 31, 2021, to December 31, 2021. As of June 25, 2021, GeM portal has served 6.87 million orders worth Rs. 116,291 crore (US$ 15.67 billion) from 2.0 million registered sellers and service providers for 52,651 government buyers.

The Ministry of MSME runs numerous schemes targeted at providing credit and financial assistances such as the Prime Minister’s Employment Generation Programme, Credit Linked Capital Subsidy Scheme, Credit Linked Capital Subsidy Scheme; Skill development and training schemes such as A Scheme for Promotion of Innovation, Rural Industry & Entrepreneurship (ASPIRE), Entrepreneurship and Skill Development Programmes (ESDP); infrastructure development schemes such as Scheme of Fund for Regeneration of Traditional Industries (SFURTI), Scheme for Micro & Small Enterprises Cluster Development Programme (MSE–CDP) and technological and quality upgradation schemes such as Financial Support to MSMEs in ZED Certification and Support for Entrepreneurial and Managerial Development of SMEs through Incubators. To provide reliable measures and set benchmark to boost and strength the MSME sector in India, TransUnion CIBIL, in partnership with the Ministry of Statistics & Programme Implementation (MoSPI), launched the MSME Credit Health Index on November 2, 2020.

In September 2021, the Indian government announced to extend the scope of the Emergency Credit Line Guarantee Scheme (ECLGS) to MSMEs and extend it until March 2022.

In October 2021, the Indian government, under the Pradhan Mantri Mudra Yojana (PMMY), declared credit disbursement of Rs. 111,000 crore (US$ 15.16 billion) to micro-enterprises in the first half of FY22, covering ~95.19% of the total sanctioned amount.

Indian Micro, Small and Medium Enterprises (MSMEs) are rapidly adopting digital payments over cash, with 72% payments done through the digital mode compared with 28% cash transactions. Rise in digital adoption presents prospects for further growth in the sector.

The BSE SME (small and medium enterprises) platform is expected to witness >60 SMEs to enter the market in one year (2021-22) to bring up equity funds for meeting their business requirements. The initial public offering (IPO) route witnessed 16 SMEs enter the market; they raised Rs. 100 crore (US$ 13.74 million) in 2020. In June 2021, Bombay Stock Exchange (BSE) announced that it has collaborated with Electronics and Computer Software Export Promotion Council (ESC) to build awareness among small businesses and start-ups about advantages of listing.

In September 2021, Aerospace Engineers Private Limited, a Tamil Nadu-based MSME, secured a contract from Boeing to produce and supply critical aviation components.

In September 2021, Walmart and Flipkart announced the completion of the first phase of training of >2,500 MSMEs under Vriddhi, the supplier development programme.

In September 2021, Flipkart introduced 'Flipkart Boost’ to help digital-first consumer brands and empower MSMEs.

In September 2021, HDFC Bank collaborated with the National Small Industries Corporation (NSIC) to offer credit support to the micro, small and medium enterprise (MSME) sector.

In August 2021, the US Agency for International Development (USAID) and the US International Development Finance Corporation (DFC) collaborated with Kotak Mahindra Bank to support MSMEs.

In August 2021, Facebook India, in collaboration with Indifi, announced ‘Small Business Loans Initiative’, a new programme to support small and medium businesses (SMBs) get quick access to credit via independent lending partners.

In August 2021, Indian Bank introduced 'MSME Prerana', an online business-mentoring programme for MSMEs in Odisha. In FY21, the state (Odisha) accounted for ~5% of the total MSME credit exposure of Indian Bank and recorded an increase of 39% YoY.

In July 2021, Amazon India announced to expand its existing nine fulfilment centres and launch additional 11 new centres. This expansion plan is expected to create direct and indirect job opportunities in India and further strengthen Amazon’s foothold in the country.

In July 2021, Razorpay acquired TERA Finlabs, a provider of embedded financing solutions, to strengthen capabilities in data-driven risk management, capital solutions and credit underwriting to financially support MSMEs.

In July 2021, Amazon India introduced Digital Kendra in Surat—its first brick and mortar resource centre to assist ‘kiranas’ and small businesses to go digital.

In July 2021, the Federation of Indian Export Organisations (FIEO) signed a memorandum of understanding (MoU) with Aramex India, logistics services provider, to support MSME exporters in India.

In June 2021, Tide, a UK-based business financial platform, announced to invest >Rs. 1,000 crore (US$ 134.21 million) in India over the next five years to tap the rising SME (small and medium-sized enterprises) market.

The NSIC, through an MoU with APEDA, will help its MSME members in exploring the export potential of their agricultural and processed foods products. Additionally, APEDA members will get access to NSIC schemes, which would help them address issues pertaining to technology adoption, skills, product quality, and market access

Budget allocation for MSMEs in FY22 more than doubled to Rs. 15,700 crore (US$ 2.14 billion) vis-à-vis Rs. 7,572 crore (US$ 1.03 billion) in FY21.

In July 2021, Lok Sabha passed a bill on ‘Factoring Regulation (Amendment)’ to expedite the payments ecosystem for MSMEs.

The government also announced Rs. 3 lakh crore (US$ 40.85 billion) collateral-free automatic loans for businesses.

In Union Budget 2021, the government announced funds worth Rs. 10,000 crore (US$ 1.36 billion) for ‘Guarantee Emergency Credit Line’ (GECL) facility to eligible MSME borrowers, giving a major boost to the sector.

In September 2021, Union Minister for MSMEs, Mr. Narayan Rane introduced ‘India Export Initiative’ and ‘IndiaXports 2021 Portal’. This initiative will help exports reach its Rs. 2,928,000 crore (US$ 400 billion) target by the end of FY22 and further push it to Rs. 7,320,000 crore (US$ 1 trillion) by FY27.

In September 2021, Khadi and Village Industries Commission (KVIC) established the first ‘Silk Yarn Production Centre’ in Odisha to boost the local silk industry and generate employment.

In September 2021, Union Minister for MSMEs, Mr. Narayan Rane inaugurated Rohtak Technology Centre, which is expected to train >8,400 trainees annually.

In September 2021, Khadi and Village Industries Commission (KVIC) launched SPIN (Strengthening the Potential of India) scheme and built a pottery cluster under SFURTI Scheme in Varanasi to support >1,100 individuals of the marginalised potters’ community.

Indian MSME Industry Report (September, 2021)
Download PDF Download PDF  (Size: 761.92 KB )

Click to access the MSME Industry Archived Report

Posters

Brand India Pharma

THE INDIAN MSMES SECTOR CONTRIBUTES ABOUT 29% TOWARDS THE GDP

The Micro Small and Medium Enterprises (MSMEs) sector is a major contributor to the socio-economic...

+ More >

Brand India Pharma

IBEF Publications

IBEF Publication

Agri Export Policy - Towards smoother trade, wider global presence

English

+ More Publications >

IBEF Publication

IBEF Blog - INDIA ADDA – PERSPECTIVES ON INDIA More

Mining sector reforms and the road ahead
IBEF, Knowledge Centre

Introduction

India is rich in natural resources, notably minerals, ma...

Women Entrepreneurs Shaping the Future of India
IBEF, Knowledge Centre

Introduction

Women entrepreneurs and their increasing presence in Ind...

How the Indian talent pool is enriching the global economy
IBEF, Knowledge Centre

Introduction

India is swiftly gearing towards a US$ 5 trillion econom...

India’s promising outlook in defence manufacturing
IBEF, Knowledge Centre

Overview – Defence Manufacturing in India

The Indian defence se...

MSME Sector – Imperative to Lift Indian Economy
IBEF, Knowledge Centre

Introduction

Micro, small and medium enterprises (MSMEs) are consider...

Aviation Sector - access to all
IBEF, Knowledge Centre

India’s aviation industry overview

The Indian aviation sector i...

Case Studies More

JOIN IBEF.org

Join IBEF.org now. Enjoy FREE subscriptions downloads, updates and more.

Error

Already a member?
Login / Retrieve Password