Understanding MSME
Understanding MSME
Micro, Small, and Medium Enterprises (MSMEs) are the backbone of India’s economy. Knowing where your business fits in the MSME framework is the first step to accessing government benefits, financing, and support programs.
What is an MSME?
Definition of MSMEs (As per MSMED Act, 2006)
The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, defines MSMEs based on investment and turnover. These criteria were revised in 2020 under the Aatmanirbhar Bharat Abhiyan.
MSME Classification Table
| Type | Timeline | Investment in Plant & Machinery / Equipment | Annual Turnover |
|---|---|---|---|
|
Micro |
Current |
Up to ₹1 Crore |
Up to ₹5 Crore |
|
Revised |
Up to ₹ 2.5 crore |
Up to ₹ 10 crore |
|
|
Small |
Current |
Up to ₹10 Crore |
Up to ₹50 Crore |
|
Revised |
Up to ₹25 Crore |
Up to ₹100 Crore |
|
|
Medium |
Current |
Up to ₹50 Crore |
Up to ₹250 Crore |
|
Revised |
Up to ₹125 Crore |
Up to ₹500 Crore |
Note: Both investment and turnover conditions must be satisfied for classification.
Who Can Be an MSME?
Eligible Business Types
MSME status is available to a wide range of entities engaged in manufacturing, production, processing, or service delivery, including:
Sole Proprietorships
Partnership Firms
Limited Liability Partnerships (LLPs)
Private Limited Companies
Co-operative Societies
Self-Help Groups (SHGs)
Trusts
Eligible Startups
Sectors Covered: Textiles, Food Processing, IT Services, Machinery, Electronics, Handicrafts, Renewable Energy, Education, Logistics, and more.
Why MSME Classification Matters
MSME status unlocks a range of benefits, including:
Access to government schemes and subsidies
Collateral-free loans (like MUDRA or CGTMSE)
Interest subvention and credit guarantees
Eligibility for GeM (Government e-Marketplace) procurement
Technology upgradation and training programs
Lower compliance burdens for registered MSMEs
Tip: Registering through the Udyam Portal makes you eligible for these with minimal paperwork.
How to Register as an MSME
You can register your business as an MSME through the official Udyam Registration Portal — a paperless, Aadhaar-based process.
To Register -> Click Here
MSME Eligibility Checker Tool
Coming Soon: MSME Eligibility Checker
Answer a few quick questions to check if your business qualifies as a Micro, Small, or Medium enterprise — instantly.