How do MSMEs contribute to nearly half of India's exports?
Synopsis
The Economic Survey 2025-26 reveals the pivotal role of Micro, Small, and Medium Enterprises (MSMEs) in India's economy, highlighting their significant contributions to manufacturing, exports, and employment. Discover how these enterprises are crucial for India’s growth and global integration.
Key Takeaways
MSMEs account for 35.4% of India's manufacturing.
They contribute around 48.58% of India's exports.
MSMEs employ over 32.82 crore individuals.
The SRI Fund has provided Rs 15,442 crore to 682 MSMEs.
MSME lending has been a key driver of industrial credit growth.
New Delhi, Jan 29 (NationPress) Micro, Small and Medium Enterprises are integral to India's industrial framework, representing about 35.4% of manufacturing, nearly 48.58% of exports, and 31.1% of the GDP, as reported in the Economic Survey 2025-26 by the government on Thursday.
The Self‑Reliant India (SRI) Fund, initiated to inject Rs 50,000 crore as equity support for MSMEs, has benefited 682 MSMEs with investments totaling Rs 15,442 crore as of November 30, 2025, according to the official announcement.
India's MSME sector comprises over 7.47 crore businesses, employing more than 32.82 crore individuals, making it the second-largest source of employment after agriculture.
The Finance Ministry in the Economic Survey pointed out that MSME credit has shown a favorable trend recently, supported by various government measures aimed at improving credit access to the sector.
MSME lending has emerged as the main catalyst for industrial credit growth in H1FY26, with year-on-year MSME credit growth significantly surpassing that of larger industries.
Additionally, the public markets for SMEs have experienced remarkable growth over the last two years, driven by favorable market conditions and increased digital retail involvement.
The SRI fund aims to provide capital assistance to the Daughter Funds for onward distribution to MSMEs, focusing on growth capital through equity, quasi-equity, and debt, with Rs 10,000 crore contributed by the government and Rs 40,000 crore from private equity and venture capital.
On a global scale, MSMEs comprise about 90% of businesses and generate over 50% of total employment worldwide, as highlighted in the Survey.
“With India's manufacturing sector poised for enhanced global integration, the role of the MSME sector is vital for effective supply-chain engagement, promoting local value addition, and encouraging inclusive regional development,” it stated.
Furthermore, innovation is being solidified through the MSME-Innovative component, which supports incubation, design initiatives, and IPR protection.
In 2024, India represented an estimated 2.9% of global manufacturing GVA and 1.8% of global merchandise exports, indicating substantial opportunities for expanding its international manufacturing presence.
Point of View
I believe that the growth and support of the MSME sector are essential for India's economic resilience. This sector not only provides significant employment but also plays a vital role in manufacturing and exports. The government's initiatives, including the Self-Reliant India Fund, are crucial for fostering innovation and ensuring sustainable development in this space.
NationPress
11 May 2026
Frequently Asked Questions
What percentage of India's GDP do MSMEs contribute?
MSMEs contribute approximately 31.1% to India's GDP.
How much equity funding has the SRI Fund allocated to MSMEs?
The Self-Reliant India Fund has allocated Rs 50,000 crore as equity funding for MSMEs.
What is the role of MSMEs in employment?
MSMEs employ over 32.82 crore individuals, making them the second-largest employer in India after agriculture.
How has MSME credit growth performed recently?
MSME credit growth has been positive, significantly outpacing that of larger industries.
What is the global significance of MSMEs?
Globally, MSMEs account for about 90% of businesses and over 50% of total employment.
