31/10/2025
In India, MSMEs (Micro, Small, and Medium Enterprises) are classified based on their investment in plant and machinery or equipment and annual turnover, as per the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, which was revised in 2020.
Here’s the classification:
1. Micro Enterprises
• Investment: Up to ₹1 crore
• Annual Turnover: Up to ₹5 crore
• Example: Small tailoring units, local food processing businesses, small repair shops, handicraft units, etc.
2. Small Enterprises
• Investment: Up to ₹10 crore
• Annual Turnover: Up to ₹50 crore
• Example: Small manufacturing plants, furniture makers, boutique hotels, small IT firms, etc.
3. Medium Enterprises
• Investment: Up to ₹50 crore
• Annual Turnover: Up to ₹250 crore
• Example: Mid-sized manufacturing companies, auto component makers, established service providers, export-oriented units, etc.
MSMEs operate across manufacturing, services, and trade sectors, playing a vital role in employment generation, industrial growth, and rural development. They are often called the “backbone of the Indian economy” because they contribute significantly to India’s GDP, exports, and innovation ecosystem.