The MSME sector contributes to India’s GDP by as much as 30%, manufacturing output by almost 45%, and exports by around 48%. As a result, it has become the backbone of the country's economy, generating employment for over 11 crore people. While the MSME business list has recently crossed 65 million, the sector has received a new classification based on investment and annual turnover.
According to the new classification, the MSME sector includes trading, manufacturing, and service-based businesses in India. The government has issued a specific list of micro, small & medium enterprises in India. Let's learn about them.
Classification of MSME (Micro, Small, and Medium Enterprises)
According to the Micro, Small and Medium Enterprises Development (MSMED) Act of 2006 definition, all businesses under the service and manufacturing categories were a part of the MSMEs sector. However, Union Minister Nitin Gadkari announced an amendment in July 2021 to revise the MSME definition. According to the new definition, the classification of MSME is as follows:
| Category | Investment Limit | Turnover Limit |
| Micro | Rs 1 Crore | Rs 5 Crore |
| Small | Rs 10 Crore | Rs 50 Crore |
| Medium | Rs 50 Crore | Rs 250 Crore |
Which are the Sectors that Come Under MSME?
All business activities in manufacturing and services are a part of the MSME sector. Broadly speaking, they fall under two categories:
Manufacturing Sector: MSMEs in the manufacturing sector produce finished products from raw materials and contribute significantly to the country’s total manufacturing output and exports. These include textiles, food processing, leather products, engineering, fabrication, pharmaceuticals, chemicals, etc.
Services Sector: According to the Udyam portal, the services sector comprises a larger proportion of businesses than the manufacturing sector. These include IT, tourism, education, healthcare, retail and wholesale trade.
Others: Other sectors in the MSME industry include agriculture and allied activities, transportation and logistics, real estate and construction, etc.
Also Read: Small Business Ideas With Low Investment
List of Businesses that Come Under the MSME Sector
Here is a handy list of small and medium enterprises in India approved by the Indian government:
- Wholesale and retail operations
- Glass and ceramics products: granite, glass flooring, and roofing tiles
- Auto parts: door channels, horn buttons, wiper blades, battery cell testers
- Industrial testing labs
- IT solutions: application service provider, server bank creation, smart card customisation
- Rubber products manufacturing
- Call centre services
- Stationery items production
- Bicycle components manufacturing
- Poultry farming
- Wooden and furniture products
- Jute and coir industry
- Paper-based and card-based products, printing
- Handicraft activities: weaving, spinning, artisan crafts
- Hosiery and Khadi product manufacturing
- Ayurvedic products and active pharmaceutical ingredients
- Supplements and micronutrients for plant growth
- Watches, motors, transformers, radios, recorders, VCRs
- Engineering and fabrication services
- Mechanically engineered products: clocks, steel cupboards, wire cutters, valves
- CCTV installation, electronic surveillance, and security solutions
- Automotive electronic components
- Toughened metallic ware production
- Dry cleaning services, Laundromats, laundry services
- Multi-channel dish cable TV with dish antenna
- Low-capital retail trade
- STD / ISD booth services
- Back-office data operations
- Agricultural farm equipment servicing: pumps, tractors, ring boring machines
- Photography lab solutions
- Equipment leasing and rental services
- X-ray clinics
- Automotive repair services, garages, and welding services
- Salons, beauty parlours, day-care services
- Lamination, Xerox, and other related services
- Energy-efficient pump manufacturing
- Educational institutions and training centres
- Consultancy services for management and job placement
- Natural flavours and fragrances
- Moulding of plastic containers, household goods, combs, plastic toys, umbrella frames
- Leather goods production: wallets, belts, bags, shoes
Also Read: Best Small Business Ideas For Rural Areas, Villages, Small Towns In India
List of Businesses that do not Come Under MSME
These businesses that do not come under the list of MSME in India:
- Betting and gambling companies
- Timber harvesting and forestry
- Aquaculture and fishing businesses
- Motorcycle repair and trade
- Retail trade, excluding motorcycles and vehicles
- Household activities employing domestic personnel
- Activities of extraterritorial bodies and organisations
- Goods produced by households for personal use
Also Read: 10 Best And Easy Business Ideas In India
How do MSME Loans Work?
Companies falling under the MSME list of business enterprises can significantly benefit from an MSME Business Loan. These are unsecured loans they may obtain to cover various business-related expenses and achieve their expansion goals. Many MSMEs also borrow these loans to build working capital or improve their credit rating.
Top lending institutions like Hero FinCorp approve these loans based on the business’s age, turnover, performance, finances, etc. Once availed, borrowers can use the loan amount to repay with interest in easy EMIs.
Also Read: 10 Best Business Ideas In Delhi
How can a Business Loan Benefit Businesses that Fall Under the MSME Sector?
Here is how a Business Loan from Hero FinCorp can benefit businesses falling under the MSME business list:
- Ample loan amount of up to Rs 40 Lakh
- Competitive Business Loan interest rate, starting at 14% per annum
- Flexible repayment terms of up to 5 years
- No collateral requirement
- Easy online application
- Quick approval and disbursal
- No profit or equity sharing
Also Read: 15 Zero Investment Business Ideas In India
How to Apply for a Business Loan Online?
Here is how to apply for a Business Loan from Hero FinCorp online:
- Visit the Hero FinCorp website.
- Go to the Business Loan page and click Apply Now.
- Fill out an online application form.
- Submit the necessary documents.
- Enter the required loan amount and select an appropriate tenure using an EMI calculator.
- If approved, you will get a reference number for future use.
- A representative will get in touch for more information if needed.
- Review and accept the loan offer to get disbursal directly into your bank account.
Also Read: Top 10 Service Business Ideas
Conclusion
The Indian MSME sector is constantly evolving. Therefore, business owners must stay updated about the latest business listings. The classification helps businesses seek adequate financing from Hero FinCorp when required and take advantage of government schemes and promotions.
Frequently Asked Questions
1. What is NIC Code?
NIC code stands for National Industrial Classification Code, a 2-3 digit number necessary for Udyog Aadhaar registration.
2. How do I apply for a Business Loan?
Go to the Business Loan page on the Hero FinCorp website, click Apply Now to fill out an online application form, and upload the necessary documents. Once approved, you will get the loan in your bank account.
3. Who is not eligible for MSME?
Individuals and business owners who run a non-MSME business are not eligible for MSME registration.
4. What information does an MSME business list typically include?
An MSME list of business enterprises includes information about businesses that fall under the category of MSMEs according to their investment and annual turnover.
5. How many MSME companies are there in India?
As of 6th April 2024, the Udyam portal shows 4,18,13,326 registered MSMEs, including the Udyam Assist Platform. Log on to https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.htm for the latest figure.
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