India’s MSME sector, often termed the "backbone of the economy," employs 11 crore people, contributes 30% to GDP, and drives 45% of manufacturing output and 45% of exports[1][4][8]. With the Union Budget 2025-26 revising classification criteria and launching transformative schemes, this report dissects the sector’s structure, challenges, and opportunities, focusing on B2B MSMEs and actionable insights for fintech innovation.
As of February 2025, 6.3 crore MSMEs are registered on the Udyam portal[4][6]. The revised classification (Budget 2025) expands eligibility, enabling enterprises to scale without losing benefits:
| Category | Investment Limit (₹ Cr) | Turnover Limit (₹ Cr) | % of Total MSMEs |
|---|---|---|---|
| Micro | ≤2.5 | ≤10 | 93% |
| Small | ≤25 | ≤100 | 6% |
| Medium | ≤125 | ≤500 | 1% |
Revenue Distribution:
Source: Udyam Portal Data (2025), Budget Documents
| Sector | % Share | Key Sub-Industries (B2B Focus) |
|---|---|---|
| Manufacturing | 45% | Auto Components, Textiles, Pharmaceuticals, Electronics, Green Energy (EVs, Solar Panels) |
| Services | 40% | IT/ITES, Logistics, Consulting, Healthcare Tech, Fintech |
| Trading | 15% | Agri-Commodities, Industrial Supplies, E-commerce |
Emerging Sub-Sectors: