Micro, Small and Medium Enterprises (MSMEs) play a crucial role in India’s industrial landscape, contributing significantly to the country’s manufacturing, exports, and GDP. According to the Economic Survey 2025-26, MSMEs account for about 35.4% of manufacturing output, nearly 48.58% of exports, and 31.1% of the GDP. The Self-Reliant India (SRI) Fund, aimed at providing equity funding to MSMEs, has already supported 682 enterprises with investments totaling Rs 15,442 crore as of November 30, 2025.
India’s MSME sector is vast, with over 7.47 crore enterprises employing more than 32.82 crore individuals, making it the second-largest employer in the country after agriculture. The Finance Ministry emphasized in the Economic Survey that MSME credit has been on an upward trend, supported by government initiatives to enhance credit availability to the sector. Notably, MSME lending has been a key driver of industrial credit growth in the first half of the financial year 2025-26, with year-on-year credit growth for MSMEs surpassing that of large industries.
The survey also highlighted the significant growth in SME public markets over the past two years, driven by favorable market conditions and increased digital retail participation. The SRI Fund, which includes Rs 10,000 crore from the government and Rs 40,000 crore from private equity and venture capital funds, aims to provide capital support to MSMEs through equity, quasi-equity, and debt, facilitating their growth.
Globally, MSMEs play a vital role, constituting around 90% of businesses and accounting for over 50% of total global employment, as per the Survey findings. The MSME sector in India is crucial for enhancing supply-chain participation, promoting local value addition, and supporting inclusive regional growth, especially as the country’s manufacturing sector integrates more deeply into the global economy. Additionally, the MSME-Innovative component focuses on institutionalizing innovation by supporting incubation, design interventions, and intellectual property rights protection.
India’s share in global manufacturing GVA and merchandise exports in 2024 stood at 2.9% and 1.8%, respectively, indicating significant potential for expanding its manufacturing footprint on the global stage.
