MSME Exports Triple in Four Years, Boosting India’s Economy
The exports from India’s Micro, Small, and Medium Enterprises (MSMEs) have shown remarkable growth, rising from ₹3.95 lakh crore in 2020-21 to ₹12.39 lakh crore in 2024-25. This surge highlights the crucial role MSMEs play in driving India’s economy and enhancing global trade. The number of exporting MSMEs has also seen a significant increase, from 52,849 in 2020-21 to 1,73,350 in 2024-25.
In terms of export contribution, MSMEs accounted for 45.73% of India’s total exports in 2023-24, which further increased to 45.79% by May 2024. This steady growth underscores the sector’s expanding influence on India’s trade performance.
MSMEs’ Role in Economic Growth
The MSME sector has consistently demonstrated resilience and adaptability, contributing significantly to India’s Gross Domestic Product (GDP). The Gross Value Added (GVA) by MSMEs to GDP was 29.7% in 2017-18, rising to 30.1% in 2022-23. Despite challenges posed by the COVID-19 pandemic, the sector maintained a contribution of 27.3% in 2020-21 and rebounded to 29.6% in 2021-22. These figures reflect the sector’s vital role in driving economic growth and stability, emphasizing its enduring importance to India’s economy.
Scaling Up: Transition of Enterprises
The growth of the MSME sector is evident in the scaling up of micro and small enterprises into medium enterprises. Under the revised classification effective from July 1, 2020, MSMEs are categorized as:
- Micro Enterprises: Investment up to ₹1 crore and turnover up to ₹5 crore.
- Small Enterprises: Investment up to ₹10 crore and turnover up to ₹50 crore.
- Medium Enterprises: Investment up to ₹50 crore and turnover up to ₹250 crore.
Between July 2020 and July 2024, a significant number of enterprises transitioned to the medium category. From 2020-21 to 2021-22, 714 micro enterprises and 3,701 small enterprises scaled up to medium enterprises. This trend continued with 2,372 micro enterprises and 17,745 small enterprises upgrading to medium enterprises in 2023-24 to 2024-25.
This progression highlights the sector’s robust growth and its capacity to adapt to changing economic dynamics.
MSMEs: The Backbone of India’s Economy
MSMEs remain a cornerstone of India’s economic landscape, playing a pivotal role in employment generation, entrepreneurship promotion, and overall development. By fostering innovation and enhancing export competitiveness, MSMEs are instrumental in India’s journey to becoming a global economic powerhouse.
With their resilience, innovation, and adaptability, MSMEs continue to drive the nation’s growth, providing jobs to millions and contributing to inclusive economic development. As India aims to strengthen its position on the global stage, the MSME sector is set to remain a critical driver of progress.
