MSMEs and Industrial Policy

India’s industrial policy increasingly focuses on small businesses and manufacturing growth, through dedicated institutions and flagship initiatives.

📑 Contents

1Must Know
2Good to Know
3Test Yourself
4Great to Know
5Current Affairs

Must Know

SIDBI (Small Industries Development Bank of India), established in 1989, supports small-scale industries with credit and development finance.
The ‘Make in India’ initiative was launched on 25 September 2014. It aims to boost domestic manufacturing and attract foreign investment.
The ‘Start-up India’ initiative was launched in January 2016. It aims to build a robust ecosystem for innovation and entrepreneurship.
The Index of Industrial Production (IIP) measures short-term changes in the volume of industrial production.
Special Economic Zones (SEZs), under the SEZ Act 2005, aim to promote exports through dedicated industrial areas.
An MSME is classified into one of three tiers — Micro, Small, or Medium. Classification uses two criteria together: investment in plant and machinery, and annual turnover.

Good to Know

India’s Index of Core Industries tracks output in sectors like coal, steel, and electricity, seen as key economic indicators. A July 2026 revision added Iron Ore, taking the basket from 8 industries to 9.
The 1991 New Industrial Policy significantly raised limits for automatic approval of foreign equity participation.
The government approved 20 National Investment and Manufacturing Zones (NIMZs), meant to become large, integrated industrial townships. Only a few, including Kalinganagar, Sangareddy, and Prakasam, have received final approval so far.

Test Yourself

Great to Know

The steady shift from heavy-industry focus toward MSME and startup support reflects changing priorities in India’s industrial strategy over recent decades.
Indicators like the IIP and Core Industries Index give policymakers near real-time signals about the health of India’s manufacturing sector.
Initiatives like Make in India and SEZs work together, aiming to boost both domestic production and India’s global export competitiveness.

Current Affairs

On 16 July 2026, the Centre for Trade and Investment Law (CTIL) launched a guidebook, “Going Global: A Practical Guide for Indian MSMEs,” with the Confederation of Indian Industry (CII). (Source: PIB)
The guidebook helps MSMEs find export opportunities and meet international standards. It also covers preferential Rules of Origin under India’s Free Trade Agreements. (Source: PIB)
The event also introduced the Trade Remedies Advisory Cell (TRAC). It raises awareness of trade remedy laws, helping domestic industry respond to unfair trade practices and import surges. (Source: PIB)
QCI-NSIC MoU (9 July 2026): The Quality Council of India and the National Small Industries Corporation signed a five-year pact. It links QCI’s ZED Certification with NSIC’s market-access schemes for MSMEs. See IndEco0156 — Quality Council of India (QCI) for full coverage. (Source: PIB)
ECLGS 5.0 (Emergency Credit Line Guarantee Scheme) crossed 4.11 lakh guarantees issued, with the guaranteed amount reaching over ₹1.55 lakh crore. (Source: PIB)
The government revised MSME classification limits, effective 1 April 2025. For Micro enterprises alone, the investment limit rose from ₹1 crore to ₹2.5 crore, and the turnover limit rose from ₹5 crore to ₹10 crore. Small and Medium tiers were expanded too. (Source: Insights on India)
The Production Linked Incentive (PLI) scheme carries a ₹1.91 lakh crore outlay across 14 sectors. By March 2026, it had drawn cumulative investment of over ₹2.40 lakh crore. It has generated more than 14.15 lakh direct and indirect jobs. (Source: DD India)
The Cabinet approved 12 new industrial cities under the National Industrial Corridor Development Programme (NICDP) in 2025. This programme now carries the bulk of India’s fresh industrial-corridor investment, including where older NIMZs once stalled. (Source: PIB)
On 4 August 2026, the government detailed growing ZED Certification uptake. As of 7 July 2026, about 9.49 lakh MSMEs had registered under the scheme. Over 6.7 lakh had achieved certification. (Source: PIB)
Certifications break down across three tiers: over 6.67 lakh Bronze, 6,700 Silver, and 4,800 Gold. The scheme has also provided more than ₹913 crore in financial support, to help MSMEs adopt sustainable practices. (Source: PIB)
Since 11 November 2023, women-owned MSMEs get a 100% subsidy on ZED Certification costs, making it effectively free. This aims to boost women’s participation in quality manufacturing. (Source: PIB)
22 States and UTs have folded ZED into their own industrial policies, offering extra incentives. Separately, 19 financial institutions now offer certified MSMEs cheaper processing fees and interest rates. (Source: PIB)
On 30 June 2026, MSME Minister Jitan Ram Manjhi reviewed MSME schemes in Ladakh. He became the first Union MSME Minister to visit the Union Territory. (Source: PIB)
He toured PMEGP-supported enterprises in Leh, and KVIC’s CREATE Centre, which trains artisans in Pashmina yarn production. He also visited a SEWA skill-training centre, run with MGIRI Wardha’s support. (Source: PIB)
On 30 July 2026, Parliament reviewed MSME digital and AI adoption support. (Source: PIB)
The ₹10,371.92 crore IndiaAI Mission, spanning seven pillars, aims to boost MSME productivity through AI. (Source: PIB)
Separately, the government detailed steps to revive rural industry: PMEGP, PM Vishwakarma, and ODOP promotion. (Source: PIB)
PMEGP’s project-cost cap rose, from ₹25 lakh to ₹50 lakh for manufacturing, and ₹10 lakh to ₹20 lakh for services. (Source: PIB)
About 80% of PMEGP units, over the last five years, were in rural areas. (Source: PIB)
MSMEs are also being onboarded to ONDC, under the MSME TEAM marketing initiative. (Source: PIB)
On food processing, the ₹10,900 crore PLISFPI scheme now covers 69 MSMEs, among 127 companies. (Source: PIB)
It has disbursed ₹3,271.44 crore in incentives, and created 34 lakh tonnes of annual processing capacity. (Source: PIB)
On 24 July 2026, the Ministry highlighted its MSME Online Dispute Resolution (ODR) Portal. (Source: PIB)
One Mumbai enterprise recovered ₹21.06 lakh in dues, within 24 hours of filing. (Source: PIB)
A Kolkata firm recovered nearly ₹5 lakh too, via the Facilitation Council under the MSMED Act. (Source: PIB)
On 23 July 2026, the government detailed credit-guarantee support for small enterprises. (Source: PIB)
The CGS guarantee ceiling rose from ₹5 crore to ₹10 crore. (Source: PIB)
Annual guarantee fees were also cut by half, to as low as 0.37% a year. (Source: PIB)
Loans up to ₹20 lakh, for MSEs, now need no collateral at all, under RBI rules. (Source: PIB)
Separately, the PM Vishwakarma scheme, launched in 2023, supports artisans across 18 traditional trades. (Source: PIB)
On 22 June 2026, the Office of the Chief Labour Commissioner (Central) launched a Special Drive for Expeditious Disposal of Long-Pending Labour Cases, running from 1 June to 31 August 2026. (Source: PIB)
The Regional Labour Commissioner (Central), New Delhi, identified 178 pending claim cases involving the Delhi Metro Rail Corporation (DMRC). (Source: PIB)
Notices went out on 15 June 2026, listing all 178 cases for a single day of hearings, on 24 June 2026. This cluster-based hearing approach is meant to serve as a model for other regions. (Source: PIB)