India’s MSMEs drive economic growth through surging exports, rising from ₹3.95 lakh crore to ₹12.39 lakh crore in four years. This article explores their resilience, GDP contributions, scalability, and pivotal role in employment, innovation, and global trade leadership.
Export Growth: A Testament to MSME Potential
Micro, Small, and Medium Enterprises (MSMEs) have emerged as key players in India’s trade landscape, recording an exceptional rise in exports from ₹3.95 lakh crore in 2020-21 to ₹12.39 lakh crore in 2024-25. The number of exporting MSMEs has also skyrocketed, growing from 52,849 in 2020-21 to 1,73,350 in 2024-25. MSMEs’ contribution to total exports increased from 45.73% in 2023-24 to 45.79% by May 2024, showcasing their crucial role in strengthening India’s global trade footprint.
Resilience in GDP Contributions
India’s MSME sector has consistently demonstrated resilience, contributing significantly to the nation’s Gross Domestic Product (GDP). Their gross value added (GVA) rose from 29.7% in 2017-18 to 30.1% in 2022-23. Even during the COVID-19 pandemic, the sector maintained a robust 27.3% contribution in 2020-21 and rebounded to 29.6% in 2021-22. These figures underline the sector’s adaptability and its enduring importance to India’s economic growth.
Scaling Up: Micro to Medium Enterprises
A substantial upscaling within the MSME sector reflects its dynamism. The revised classification, effective July 1, 2020, categorises enterprises as follows: microenterprises with investment up to ₹1 crore and turnover up to ₹5 crore, small enterprises with investment up to ₹10 crore and turnover up to ₹50 crore, and Medium enterprises with investment up to ₹50 crore and turnover up to ₹250 crore.
Between July 2020 and July 2024, many enterprises transitioned to medium enterprises. In 2020-21 to 2021-22, 714 micro and 3,701 Small enterprises scaled up. This trend gained momentum, with 2,372 micro and 17,745 Small enterprises advancing to medium status in 2023-24 to 2024-25. This growth underscores the sector’s robustness and its contribution to economic development.
MSMEs: The Backbone of the Economy
MSMEs are pivotal to India’s economic fabric, driving employment generation, entrepreneurship, and inclusive development. Employing millions, the sector’s resilience and innovation have positioned it as a cornerstone of India’s journey toward becoming a global economic powerhouse. By enhancing export competitiveness and fostering adaptability, MSMEs continue to fuel national growth and pave the way for a sustainable economic future.
