From enterprise to empowerment: How MSMEs are driving India’s growth story
- IBEF
- June 30, 2026
India's Micro, Small and Medium Enterprises (MSMEs) have emerged as a key driver of economic growth, employment generation and export competitiveness, supported by policy reforms, digitalisation and improved access to finance and technology. As of January 2026, the sector contributed around 31.1% to India's Gross Domestic Product (GDP), accounted for 35.4% of manufacturing output, generated 48.58% of the country's exports and provided employment to more than 38.9 crore people, making it the second-largest source of employment after agriculture. The formalisation of the sector has accelerated significantly, with registrations under the Udyam Registration Portal and the Udyam Assist Platform surpassing 8.7 crore by June 2026, enabling enterprises to access institutional credit, government procurement opportunities and various policy benefits. The Government has further strengthened financial support by enhancing the collateral-free credit guarantee limit under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) from Rs. 5 crore (US$ 529,773) to Rs. 10 crore (US$ 1.06 million), while digital initiatives such as the MSME Samadhaan Portal and CHAMPIONS Portal have improved grievance redressal and regulatory efficiency.
Government initiatives are also strengthening entrepreneurship, innovation and market access across the MSME ecosystem. The Prime Minister's Employment Generation Programme (PMEGP) has facilitated the establishment of more than 10.84 lakh micro-enterprises, creating over 97 lakh employment opportunities, while the PM Vishwakarma Scheme has registered 30 lakh beneficiaries within two years and sanctioned Rs. 5,133 crore (US$ 543.87 million) in collateral-free loans to 5.98 lakh artisans. Traditional industries have also recorded robust growth, with sales under the Khadi and Village Industries Commission (KVIC) exceeding Rs. 1.27 lakh crore (US$ 14.37 billion) during FY26, while coir exports reached Rs. 6,614.40 crore (US$ 748.43 million) in FY26. Supported by programmes such as RAMP, SFURTI, the MSME Champions Scheme and cluster-based development initiatives, the sector is expected to continue strengthening manufacturing, exports, rural entrepreneurship and inclusive economic development, reinforcing its role in India's journey towards Viksit Bharat 2047.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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