MSME Sector Drives India’s Economy: Contributing 30.1% to GDP, 35.4% of Manufacturing & 45.73% of Exports

📌 By Aaerm Law Associates — July 5, 2025

🌐 Overview

In a press conference in Mumbai on July 4, 2025, Union MSME Minister Shri Jitan Ram Manjhi shared impressive statistics highlighting the sector’s impact on the Indian economy. Based on his recent visits to IDEMI and KVIC offices in Mumbai on July 3, the minister revealed that the MSME sector accounts for 30.1% of India’s GDP, 35.4% of its manufacturing, and a remarkable 45.73% of exports.

📊 Key Sector Contributions

  • GDP: MSMEs now contribute a robust 30.1%, making them the second-largest economic engine after agriculture.
  • Manufacturing: They produce 35.4% of India’s manufactured goods.
  • Exports: They account for nearly 46% of all exports, marking them as critical pillars in global trade.

📈 Udyam & Udyam Assist Portals

  • Udyam Portal (launched July 1, 2020): Hosts over 3.80 crore registered MSMEs.
  • Udyam Assist (launched January 11, 2023): Supports 2.72 crore informal micro-enterprises.
  • Combined, these 6.5 crore units empower 28 crore Indians with employment, with the number of registered MSMEs growing 15-fold in five years.

🛠️ Landmark Schemes & Employment Initiatives

  • PM Vishwakarma Scheme: End-to-end support for artisans across 18 traditional trades.
  • PM Employment Generation Programme (PMEGP): Enabled 80.33 lakh jobs since inception, largely in rural areas (approximately 80%).
  • Credit Guarantee Scheme (CGS):
    • Credibility: ₹9.80 lakh crore in guarantees over its lifespan; ₹3 lakh crore in FY 2024–25.
    • Expansion: Beneficiaries expected to triple by 2029, with focused support for women and SC/ST entrepreneurs.

🧾 MSME Samadhaan Success

Cases on the MSME Samadhaan portal (for delayed payments) have fallen to 44,000, down from 93,000 in October 2017 — a testament to the system’s efficacy.

🏭 Institutional Strength: IDEMI & KVIC

  • The minister toured IDEMI Mumbai, which contributes to Chandrayaan components and houses cutting-edge AR/VR labs.
  • KVIC, Coir Board, and NSIC Ltd. were recognized for pushing grassroots-level MSME initiatives, bolstering GDP and exports.

👥 Job Creation & Economic Growth

  • Over 28 crore jobs credited directly to MSMEs in the past decade.
  • MSMEs are vital for balanced regional growth and inclusive employment, absorbing surplus rural labor.

🌍 Global Trade & Export Scale-up

  • Exports surged from Rs 3.95 lakh crore in 2020–21 to Rs 12.39 lakh crore in 2024–25, with over 1.73 lakh exporting enterprises — up from just 52,849 in 2020–21.

🎯 Challenges & Future Pathways

Despite impressive strides, MSMEs face hurdles:

  • Credit access remains limited despite Mudra, credit cards, and CGS support.
  • Digital adoption: Only ~7.7 million MSMEs have reached tech maturity; just 72% of transactions are digital.
  • Skill shortages, market reach, and regulatory complexity persist.

🚀 Way Forward: Policy Innovation & Growth

  • Redefining MSME classification to broaden eligibility for schemes.
  • Expanding credit & fund-of-funds: Enhanced CGS, mobile microcredit, Rs 10,000 cr startups FOF, and elevated loan limits (SC/ST/women).
  • Digital leap: Supporting automation, AI, fintech, and digital payments platforms like ONDC.
  • Global competitiveness: Facilitating trade via GeM, PLI, ODOP, BTN, and logistics modernisation.

💬 Conclusion

Union Minister Manjhi’s Mumbai announcement underscores how MSMEs are pillars of sustained Indian growth. With their expanding economic footprint and state-of-the-art institutions like IDEMI, the sector is scaling new heights. Still, addressing financing gaps, digital adoption, and skills remains vital. As MSMEs mature, India moves closer to becoming a $5‑trillion economy—anchored by firmly rooted, tech-empowered, inclusive micro-enterprises.

Share on Facebook Share on Twitter