India’s MSME Ecosystem Expands Further, Contributing Over 31% to GDP and Employing 38.9 Crore People

MSMEs today play a pivotal role in driving India's economic growth and industrial development and the sector contributes about 31.1 per cent in GDP, 35.4 per cent in manufacturing output and 48.58 per cent in exports (as per January 2026), an official fact-sheet said on Friday ahead of the World MSME Day.

With more than 38.9 crore people employed, MSMEs are the second-largest source of employment after agriculture.

The United Nations has designated June 27 as Micro, Small and Medium-sized Enterprises (MSME) Day to raise awareness about the significant contribution of MSMEs towards achieving the UN’s Sustainable Development Goals (SDGs).

The year 2025-26 marked a significant chapter in India's MSME growth story. It witnessed several landmark achievements that strengthened India's MSME ecosystem across formalisation, credit access, technology adoption, grievance redressal and market development.

Registrations under the Udyam Registration Portal and Udyam Assist Platform crossed 8.7 crore (as on June 2026). The expansion of the formal enterprise base improved access to institutional finance, government schemes and market opportunities for millions of micro and small businesses.

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) approved 29.03 lakh guarantees amounting to Rs 3.77 lakh crore during January 1-November 30, 2025. In order to improve credit availability, the guarantee coverage ceiling was enhanced from Rs 5 crore to Rs 10 crore, enabling larger collateral-free support for MSMEs, the official statement observed.

It also highlights that the sales of Khadi and Village Industries crossed Rs 1.27 lakh crore during the year with the sustained growth reflecting rising demand for locally produced goods and the increasing role of rural enterprises in employment generation.

The MSME Samadhaan Portal continued to address delayed payment disputes faced by Micro and Small Enterprises. Till June 2026, the portal received 2,56,892 applications involving claims worth Rs 55,244.29 crore. Of these, 58,148 cases were successfully disposed of by MSE Facilitation Councils.

The Champions Portal strengthened grievance redressal for enterprises. During 2025-26, it received 39,494 grievances, of which 39,387 were resolved, achieving a disposal rate of 99.72 per cent.

The government also launched the Online Dispute Resolution (ODR) Portal. It aims to reduce the incidence of delayed payments for MSEs and expand access to a technology-enabled ODR mechanism.

Beyond economic indicators, MSMEs are nurturing a vibrant entrepreneurial culture across the country. The sector has emerged as a gateway for first-generation entrepreneurs, women-led enterprises and youth-led ventures, particularly in semi-urban and rural areas.

This transformation is being reinforced by a series of enabling reforms. Initiatives such as the digital Credit Assessment Model and enhanced equity support to SIDBI are expanding their access to formal finance, the factsheet added.