Micro, Small and Medium Enterprises (MSMEs) continue to play a vital role in shaping India’s economic landscape, as highlighted in the Economic Survey 2025–26. Often described as the backbone of the industrial sector, MSMEs make a substantial contribution to manufacturing output, exports, and employment across the country.
According to the Survey, MSMEs contribute more than one-third of India’s manufacturing output and nearly half of the country’s total exports. Their impact goes beyond numbers. With over seven crore enterprises employing close to 33 crore people, the sector supports livelihoods across urban and rural regions, making it the second-largest employer after agriculture.
Recognising the importance of MSMEs, the government has introduced multiple measures to strengthen their financial capacity and long-term growth. A key initiative in this direction is the Self-Reliant India (SRI) Fund, designed to provide equity and growth capital to promising MSMEs. Through a combination of government support and private investment, the fund aims to ease capital constraints and help enterprises scale up. So far, hundreds of MSMEs have received funding support under this initiative.
Access to credit has also shown steady improvement. The Economic Survey notes that lending to MSMEs has remained strong in recent months, supported by policy interventions and targeted credit programmes. In fact, MSME lending emerged as the main contributor to industrial credit growth during the first half of the current financial year, growing at a faster pace than credit to large industries.
Beyond traditional bank finance, MSMEs are increasingly tapping capital markets. The expansion of SME listings in public markets over the past two years reflects growing investor interest, aided by favourable market conditions and wider participation from retail investors through digital platforms.
The Survey also places MSMEs at the centre of India’s global manufacturing ambitions. As India seeks deeper integration into global supply chains, small and medium enterprises are expected to play a critical role by strengthening local value addition, improving supply-chain resilience, and promoting balanced regional development. Globally, MSMEs dominate the business landscape, accounting for the vast majority of enterprises and a significant share of employment.
Innovation within the sector is being encouraged through dedicated programmes that support incubation, product design, and protection of intellectual property. These efforts are aimed at improving productivity and helping MSMEs remain competitive in both domestic and international markets.
While India’s share in global manufacturing and exports remains relatively modest, the Economic Survey points to significant untapped potential. A stronger and more innovative MSME ecosystem, supported by access to finance and markets, could play a decisive role in expanding India’s global manufacturing footprint and driving inclusive economic growth.