The Indian MSME sector contributes almost 30% to the country’s GDP, 45% of the manufacturing output, and around 48% of the country’s exports. It is indeed the backbone of the Indian economy and is a major employment generator with more than 11 crore people employed in the MSME sector. The list of businesses that come under MSMEs have crossed 65 million, with a new classification of MSMEs that’s based on annual turnover and investment in plant and machinery.
| New definition of MSME based on investment amount and turnover of the enterprise | ||
| Category | Investment limit (in ₹) | Turnover limit (in ₹) |
| Micro | 1 Crore | 5 Crore |
| Small | 10 Crore | 50 Crore |
| Medium | 50 Crore | 250 Crore |
For more details, please read the classification details here.
Which are the sectors that fall under MSME?
As per the government circular, all business activities, services, and manufacturing are covered in the MSME sector’ as long as they meet the investment and turnover criteria mentioned above. However, there could be certain exceptions to this. Broadly speaking, MSME businesses fall under two categories:
- Manufacturing business activities: MSME businesses that are in the manufacturing space, that is, they produce finished goods from raw materials, contribute to 45% of the total manufacturing output and 40% of total exports. With the popularity of the ‘Made in India’ campaign, the numbers are already growing.
- Service sector business activities: According to data in the Udyam portal, MSMEs in the service sector comprise a larger proportion as compared to those MSMEs in the manufacturing sector. Though the benefits of Udyam MSME registration are applicable to both, Indian entrepreneurs have registered 8.65 lakh enterprises under the service sector as compared to over 5.37 lakh enterprises under the manufacturing category.
What are the businesses that fall under MSME?
Here is a list of industries that fall under MSMEs. The list contains examples of businesses that fall under the definition of MSMEs.
List of businesses that fall under MSME includes the following:
- Leather products
- Moulding of products like combs, umbrella frames, plastic toys, etc.
- Natural fragrances and flavours
- Placement and management consultancy services
- Training and educational institute
- Energy efficient pumps
- Xeroxing
- Beauty parlour and crèches.
- Auto repair services, and garages.
- X-ray clinics
- Equipment rental and leasing
- Photographic lab
- Servicing of agricultural farm equipment including tractor, pump repairing, ring boring machine
- Back-office operation relating to computerised data
- STD/ISD booths
- Retail trade business with low capital
- Multi-channels dish cable TV With dish antenna
- Laundry and dry cleaning
- Toughened metallic ware
- Automotive electronic component products
- Electronic surveillance and security
- Mechanical engineering like steel almirahs, cocks, and valves, wire cutters, etc.
- Engineering and fabrication
- Recorders, VCRs, radios, transformers, motors, and watches
- Micronutrients for plants
- Active pharmaceutical ingredients and ayurvedic products
- Khadi products and hosiery products
- Handicraft activities like spinning, weaving, and artisans
- Printing and other products made of paper
- Coir industry
- Furniture and wood products
- Poultry farm
- Bicycle parts
- Stationery items
- Call centre
- Rubber products
- IT solutions like creating a server bank, application service provider, smart card customization, etc.
- Testing labs for industries
- Auto businesses such as auto parts components like horn buttons, door channels, wiper blade components, and battery cell testers
- Ceramics and glass products include roofing tiles, glass flooring tiles, granite, etc.
- Retail and wholesale business
You can visit the official Udyam portal website for more information on the businesses considered as MSME.
What are the businesses that do not fall under MSME?
As discussed above, not all businesses fall under the purview of MSMEs. The MSME Ministry has listed that organizations that are not directly dealing with manufacturing of goods or are offering services will not fall under MSME. This is because the main aim of MSME is to provide support to emerging businesses with benefits and subsidies. Accordingly, the following activities are not covered under MSMED Act, 2006:
- Gambling and betting activities
- Forestry and logging
- Fishing and aquaculture
- Trade/repair of motorcycles (wholesale and retail)
- Retail trade except of vehicles and motorcycles
- Activities of households for domestic personnel
- Goods and services produced via private households for personal use
- Activities of extraterritorial organizations and bodies
Top 5 popular industries that fall under MSMEs
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- Food products
- Textile
- Apparel
- Fabricated metal products
- Machinery & equipment
To sum up: How to take your business to the next level
The classification of businesses under MSME has helped businesses avail various government benefits and get access to multiple government loans, financing schemes, and promotions. There are several collateral free loans that MSMEs can avail to grow their business that includes MUDRA Loan under PMMY, Stand-Up India Scheme, Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), etc.
In case you need assistance to take your MSME business to the next level or find growth opportunities, register your business on Tata nexarc, a B2B growth platform to enable emerging businesses in India find new opportunities to grow their business seamlessly.
Aditi is a seasoned content writer with 8 years of experience crafting content for the Tech-driven businesses, and helping them in understanding the complexities in Saas-bases business growth. Her informative writing empowers companies to scale the product better and grow in this landscape.
I have small catering business and operating locally with in 4-5 km max only. Should i registered myself as an individual? Currently it is not even registered firm.
Registering yourself and creating your portfolio can increase your chances to grow the business across cities. It also opens gate for GEM portal where such catering related tenders you can participate in.
Rice factory agro based industry
Is covered in msme or not
Please respond
I work as a freelance marketing consultant. but I don’t have a physical office or employees, am I still considered an MSME? And would I need to get a different type of registration?
kindly email : rohan.dibu@gmail.com
Due to nature of service given by a consultant, it falls under eligibility list, but other metrics like turnover and business registration is important. In current situation, You are not an MSME.
Noor E rickshaw company Baskhari Ambedkar Nagar Uttar Pradesh India pin code 224129
Trade/repair of motorcycles (wholesale and retail)
Retail trade except of vehicles and motorcycles
above two businesses that do not fall under the MSMEs?
some other site I read it fall under the MSMEs
please clearing my doubt.
Thank you
Noor E rickshaw company Baskhari Ambedkar Nagar
Please advise, how can we help you?
We are manufacturing patented medical disposable used in infection control, drug delivery optimisation and medical intervention in ventilated patients in the ICU. All products are invented in India with some initial exports.
These are all next generation medical devices .
Do we qualify as MSME ?
Yes, it does.
What about goats and cow sellings in market It’s not mentioned above any information about that.
It is part of agriculture and animal husbandry. It seems it falls under MSME. you need to elaborate the business model to know the right answer on it.
I plan to open a resort with an approx investment of Rs. 4 Cr in state of Uttarakhand. Does this activity qualify for a loan under CGTMSE scheme service sector industry ?
Hello, I have a music studio, where I produce & write songs & music, sale them and have a recording room as well and other musical equipment and set up in Bikaner, Rajasthan. Do I come under MSME? And what are the benefits of registering.
Hi Lavanya,
If your studio is accepting charges/fee or selling on registered business name and having a business account in bank, you should fall under MSME as per the Indian government’s MSME classification. This is because your studio involves the production, writing, and sale of music, which falls within the purview of manufacturing or services.
A partnership firm for digital media services. Do we fall under MSME? and how to obtain that? Digital media services is not shown particularly in the portals. Which category will it come under?
Yes it falls under MSME category, you should register here – https://udyamregistration.gov.in/ It will be treated as service provider.
Hi
I work in real estate firm as a vastu consultant. Does my firm fall under MSME?
hello.iam kalyan ,currently iam building mvp saas website for medium enterprises.(smes),which is on demand manufacturing (design in cad to manufacturing) .Need help regarding whether on demand metal fabrication is possible in india and do we have that capable companies ?? if u have any data regarding companies ,we can discuss in my email.thank you
I am a virtual digital cryptocurrency trader with an annual turnover of approximately ₹3 crore. I would like to inquire whether I am eligible to register for Aadhaar Udyam under this business category.