Report Overview

India MSME Market – Industry Trends & Forecast Report, 2030

The India MSME Market size was estimated at USD 17.98 billion in 2023. During the forecast period between 2024 and 2030, the India MSME Market size is projected to grow at a CAGR of 8.54% reaching a value of USD 22.54 billion by 2030. Prominent drivers of the market include the increasing government's initiatives and policies aimed at boosting the MSME sector, the growing adoption of digitalization, and the sector's significant contribution to employment and GDP. Notably, the export potential of Indian products, the availability of funding and subsidies, and the rising domestic demand are crucial factors supporting this growth. Also, the lower capital requirements and extensive job opportunities in both urban and rural areas further propel the market expansion. Despite challenges like insufficient financing and organizational development, the government's support and various schemes, such as MSME Samadhaan, Udyog Aadhaar, and Mudra, provide a strong foundation for the sector's continued growth.

MSMEs – Overview

The Micro, Small, and Medium-sized Enterprises (MSME) Market in India comprises businesses that fall within defined criteria based on their size and investment in plant and machinery/equipment. These criteria are outlined by the MSME Act of 2006. MSMEs play a crucial role in India's economic development by contributing significantly to employment generation, innovation, exports, and inclusive growth. They account for a substantial portion of industrial production, exports, and GDP. The MSME sector encompasses a diverse range of businesses across various industries, ranging from manufacturing to services. Government policies and initiatives aim to support and promote the growth of MSMEs by providing a conducive policy environment, facilitating access to credit, addressing operational challenges, and fostering entrepreneurship and innovation within the sector.

India MSME Market

Growth Drivers

Growing Workforce and Economy

The MSME sector in India plays a pivotal role in increasing the workforce and fostering economic growth. With over 96% of industrial units belonging to small companies, this sector contributes significantly to job creation, accounting for 40% of industrial production and 42% of exports. Moreover, the recent surge in startups, especially in Tier-2 and Tier-3 cities, underscores the sector's dynamism and potential for employment generation. The government's focus on initiatives like Udyam registrations further propels this growth trajectory, aiming to create 5 crore additional jobs in the MSME sector by 2025. Overall, the MSME sector is a key driver in expanding the workforce and driving economic prosperity in India.

Government’s Supportive Initiatives

The Government of India has introduced various initiatives to support the MSME sector, crucial for socio-economic development. Under the Aatmanirbhar Bharat Abhiyaan Scheme, the MSME definition was revised, effective July 1, 2020. Programs like the Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE) and the Emergency Credit Line Guarantee Scheme (ECLGS) offer significant financial support. The PM Vishwakarma Scheme and the Pradhan Mantri Mudra Yojana (PMMY) further aid MSMEs through credit and skill development. Additionally, initiatives like the Government e-Marketplace (GeM) and SAMBHAV promote digital transactions and entrepreneurship, highlighting the government’s commitment to the sector's growth.

Growing Digitalization

The advent of digitalization has ushered in a new era of opportunities for Micro-, Small-, and Medium-sized Enterprises (MSMEs) in India, facilitated by initiatives like 'Digital India'. This transformational wave has provided a platform for these enterprises to leverage technology and expand their reach, from e-commerce platforms to digital marketing strategies. As MSMEs increasingly embrace digital tools to enhance efficiency and competitiveness, they are poised to capitalize on the growing digital economy and contribute significantly to India's technological advancement and global competitiveness. The sector's shift towards digitalization is evident with 72% of payments made digitally and significant e-commerce activity facilitated by platforms like the Government e-Marketplace (GeM), underscoring the sector's readiness to embrace digital solutions and seize growth opportunities in the digital era.

Challenges

Infrastructure Disparities

Healthcare infrastructure disparities in India hinder the growth of its MSME market. While specialist corporate hospitals cater to foreign tourists with state-of-the-art facilities and highly trained professionals, most Indians cannot afford these services. Additionally, the mixed urban and rural populations face poor sanitation conditions. This uneven distribution of quality healthcare services affects India's overall appeal as a MSME destination.

Impact of Escalating Geopolitical Tensions on India MSME Market

Geopolitical tensions can have a multifaceted impact on the India MSME Market. Uncertainty and instability can disrupt supply chains, hamper export opportunities, and increase operational costs for MSMEs. Furthermore, strained international relations may affect market access and foreign investments, impacting the growth prospects of MSMEs. Heightened geopolitical risks may also deter investors and lenders, limiting access to capital for small and medium enterprises. To navigate these challenges, MSMEs need to diversify their markets, enhance resilience in their operations, and closely monitor geopolitical developments. Government support through policy interventions and diplomatic efforts is crucial to mitigate the adverse effects and sustain the growth momentum of India's MSME sector.

India MSME Market

Segmental Coverage

India MSME Market – By Size

By size, the India MSME Market is divided into Micro, Small, and Medium-sized segments. The micro segment holds the highest share in the India MSME Market by size. These micro enterprises constitute the largest portion of the MSME landscape, characterized by their relatively small scale of operations and limited investment in plant and machinery or equipment. With investments not exceeding INR 10 million and annual turnovers not surpassing INR 50 million, micro enterprises form the backbone of the MSME sector. While small and medium enterprises also contribute significantly to the market, it is the sheer volume and widespread presence of micro enterprises that make them the dominant segment within the India MSME Market.

India MSME Market – By Industry

Based on industry, the India MSME Market is divided into Manufacturing (including Textiles, Food Processing, and Chemicals); Services (IT, Tourism, Education, and Healthcare); Trading (Wholesale and Retail Trade Business) segments. The services segment holds the highest share in the India MSME Market by industry. The services segment has witnessed significant growth due to the increasing demand for IT services, fueled by India's emergence as a global IT hub. Notably, the emphasis on quality education and healthcare services has led to substantial investments in these areas, further boosting the Services segment. Moreover, the Services sector is less capital-intensive compared to Manufacturing and Trading, making it more accessible for entrepreneurs and startups. Also, government policies and initiatives have focused on promoting the Services sector, contributing to its dominance in the MSME landscape. Overall, the Services segment's pivotal role in driving economic growth, innovation, and employment generation has solidified its position as the dominant force in the India MSME Market.

India MSME Market – By Region

Geographically, the India MSME Market is divided into North India, South India, East India, and West India regions. North India region holds the highest share in the India MSME Market. The National Capital Region (NCR), encompassing the entire National Capital Territory of Delhi (NCT Delhi) and parts of the States of Uttar Pradesh, Haryana, and Rajasthan, emerges as a dominant region in terms of MSMEs (Micro, Small, and Medium Enterprises) in India. The NCR boasts approximately 85,648 micro and small-scale enterprises, with a total investment of Rs. 94,929 crore and employing over 9 lakh people. The region's rich resource base, industrial development, large population, and vast consumer market have contributed to the significant growth of MSMEs. Additionally, the NCR has been recognized for its presence of informal sector activities and enterprises, providing abundant opportunities for self-employment to a large section of the population. The growth of MSMEs in the NCR is supported by various policies and schemes formulated by both the central government and the participating states within the NCR. For example, the Government of Haryana has implemented the 'Enterprises Promotion Policy-2015' and formulated the 'Mini Cluster Development Scheme' to foster the development of MSME clusters and common facility centers. Similarly, other participating states have devised interventions to promote the growth and development of MSMEs, contributing to the dominance of the NCR in the MSME sector.

Competitive Landscape

Major players operating in India MSME Market include Varroc Engineering, Orient Craft, Assam Carbon Products Ltd, Elkay Chemicals Private Ltd, Line O Matic Graphics Industries, Mohindra Fasteners Limited, Olimax Systems, and Minimac Systems. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In February 2024 – The Government of India stated that women-owned MSMEs account for 20.5% of registrations on the Udyam Portal, contributing 18.73% to employment and 10.22% to turnover.

• In January 2024 - FinAGG Technologies, an MSME financing firm, raised USD 11 million in funding from BlueOrchard, Tata Capital Ltd, SIDBI, and Prime Venture Partners to expand operations and drive innovation, particularly for women entrepreneurs.

• In August 2023 - The Reserve Bank of India launched a pilot project for the Public Tech Platform for Frictionless Credit (PTPFC), developed by its subsidiary, the Reserve Bank Innovation Hub (RBIH). The initiative aims to streamline access to credit by connecting borrowers and lenders, facilitating easier access to small loans for millions. The PTPFC will enable the disbursement of non-collateral loans for MSMEs, Kisan Credit Card loans up to INR 1.6 lakh (approximately USD 1,924), as well as dairy, personal, and home loans.

• In February 2023 – The National Small Industries Corporation Ltd (NSIC) and the Korea SMEs and Startups Agency (KOSME) signed a Memorandum of Understanding (MoU) in New Delhi to renew their MSME sector cooperation.

Scope of the Report

By Size

• Micro

• Small

• Medium-sized

By Industry

• Manufacturing (Textiles, Food Processing, Chemicals)

• Services (IT, Tourism, Education, Healthcare)

• Trading (Wholesale, Retail Trade Business)

By Region

• North India

• South India

• East India

• West India

1. Research Framework
   1. Research Objective
   2. Product Overview
   3. Market Segmentation
2. Executive Summary
3. India MSME Market Insights
   1. Industry Value Chain Analysis
   2. DROC Analysis
      1. Growth Drivers
         1. Increasing Workforce and Growing Economy
         2. Rising Government Initiatives
         3. Growing Digitalization
      2. Restraints
         1. Lack of Infrastructure
         2. Cybersecurity Concerns
      3. Opportunity
         1. Innovation and Technology Adoption
         2. E-commerce and Digital Marketing
         3. Growing Rural Markets
      4. Challenges
         1. Limited Bargaining Power
         2. Sustainability Concerns
   3. Technological Advancements/Recent Developments
   4. Regulatory Framework
   5. Porter’s Five Forces Analysis
      1. Bargaining Power of Suppliers
      2. Bargaining Power of Buyers
      3. Threat of New Entrants
      4. Threat of Substitutes
      5. Intensity of Rivalry
4. India MSME Market: Pricing Analysis
5. India MSME Market: Marketing Strategies
6. India MSME Market Overview
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Billion)
   2. Market Share & Forecast
      1. By Size
         1. Micro
         2. Small
         3. Medium-sized
         4. Others
      2. By Industry
         1. Manufacturing (Textiles, Food Processing, Chemicals)
         2. Services (IT, Tourism, Education, Healthcare)
         3. Trading (Wholesale, Retail Trade Business)
      3. By Region
         1. North India
         2. South India
         3. East India
         4. West India
7. North India MSME Market
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Billion)
   2. Market Share & Forecast
      1. By Size
      2. By Industry
8. South India MSME Market
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Billion)
   2. Market Share & Forecast
      1. By Size
      2. By Industry
9. East India MSME Market
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Billion)
   2. Market Share & Forecast
      1. By Size
      2. By Industry
10. West India MSME Market
    1. Market Size & Forecast, 2019–2030
       1. By Value (USD Billion)
    2. Market Share & Forecast
       1. By Size
       2. By Industry
11. India MSME Market: Import & Export
12. Competitive Landscape
    1. List of Key Players and Their Offerings
    2. India MSME Company Market Share Analysis, 2023
    3. Competitive Benchmarking, By Operation Channel Parameters
    4. Key Strategic Development (Mergers, Acquisitions, Partnerships, etc.)
13. Impact of Escalating Geopolitical Tensions in India MSME Market
14. Company Profiles (Company Overview, Financial Matrix, Competitive Landscape, Key Personnel, Key Competitors, Contact Address, Strategic Outlook, and SWOT Analysis)
    1. Varroc Engineering
    2. Orient Craft
    3. Assam Carbon Products Ltd
    4. Elkay Chemicals Private LTD
    5. Mohindra Fasteners Limited
    6. Line O Matic Graphics Industries
    7. Olimax Systems
    8. Minimac Systems
    9. Other Prominent Players
15. Key Strategic Recommendations
16. Research Methodology
    1. Qualitative Research
       1. Primary & Secondary Research
    2. Quantitative Research
    3. Market Breakdown & Data Triangulation
       1. Secondary Research
       2. Primary Research
    4. Breakdown of Primary Research Respondents, By Region
    5. Assumption & Limitation

*Financial information of non-listed companies will be provided as per availability

**The segmentation and the companies are subjected to modifications based on in-depth secondary for the final deliverable

List of Figures

Figure 1       India MSME Market Segmentation

Figure 2       India MSME Market Value Chain Analysis

Figure 3       Company Market Share Analysis, 2023

Figure 4       India MSME Market Size, By Value (USD Billion), 2019–2030

Figure 5       India MSME Market Share, By Size, By Value (USD Billion) 2019–2030

Figure 6       India MSME Market Share, By Industry, By Value (USD Billion) 2019–2030

Figure 7       India MSME Market Share, By Region, By Value (USD Billion) 2019–2030

Figure 8       North India MSME Market Size, By Value (USD Billion), 2019–2030

Figure 9       North India MSME Market Share, By Size, By Value (USD Billion) 2019–2030

Figure 10     North India MSME Market Share, By Industry, By Value (USD Billion) 2019–2030

Figure 11     South India MSME Market Size, By Value (USD Billion), 2019–2030

Figure 12     South India MSME Market Share, By Size, By Value (USD Billion) 2019–2030

Figure 13     South India MSME Market Share, By Industry, By Value (USD Billion) 2019–2030

Figure 14     East India MSME Market Size, By Value (USD Billion), 2019–2030

Figure 15     East India MSME Market Share, By Size, By Value (USD Billion) 2019–2030

Figure 16     East India MSME Market Share, By Industry, By Value (USD Billion) 2019–2030

Figure 17     West India MSME Market Size, By Value (USD Billion), 2019–2030

Figure 18     West India MSME Market Share, By Size, By Value (USD Billion) 2019–2030

Figure 19     West India MSME Market Share, By Industry, By Value (USD Billion) 2019–2030

List of Tables      

Table 1        India MSME Market Size, By Value (USD Billion), 2019–2030

Table 2        India MSME Market Share, By Size, By Value (USD Billion) 2019–2030

Table 3        India MSME Market Share, By Industry, By Value (USD Billion) 2019–2030

Table 4        India MSME Market Share, By Region, By Value (USD Billion) 2019–2030

Table 5        North India MSME Market Size, By Value (USD Billion), 2019–2030

Table 6        North India MSME Market Share, By Size, By Value (USD Billion) 2019–2030

Table 7        North India MSME Market Share, By Industry, By Value (USD Billion) 2019–2030

Table 8        South India MSME Market Size, By Value (USD Billion), 2019–2030

Table 9        South India MSME Market Share, By Size, By Value (USD Billion) 2019–2030

Table 10      South India MSME Market Share, By Industry, By Value (USD Billion) 2019–2030

Table 11      East India MSME Market Size, By Value (USD Billion), 2019–2030

Table 12      East India MSME Market Share, By Size, By Value (USD Billion) 2019–2030

Table 13      East India MSME Market Share, By Industry, By Value (USD Billion) 2019–2030

Table 14      West India MSME Market Size, By Value (USD Billion), 2019–2030

Table 15      West India MSME Market Share, By Size, By Value (USD Billion) 2019–2030

Table 16      West India MSME Market Share, By Industry, By Value (USD Billion) 2019–2030

Table 17      Varroc Engineering Company Overview

Table 18      Varroc Engineering Financial Overview

Table 19      Orient Craft Company Overview

Table 20      Orient Craft Financial Overview

Table 21      Assam Carbon Products Ltd Company Overview

Table 22      Assam Carbon Products Ltd Financial Overview

Table 23      Elkay Chemicals Private LTD Company Overview

Table 24      Elkay Chemicals Private LTD Financial Overview

Table 25      Line O Matic Graphics Industries

Table 26      Line O Matic Graphics Industries

Table 27      Mohindra Fasteners Limited Company Overview

Table 28      Mohindra Fasteners Limited Financial Overview

Table 29      Olimax Systems Company Overview

Table 30      Olimax Systems Financial Overview

Table 31      Minimac Systems Company Overview

Table 32      Minimac Systems Financial Overview

Table 33      Other Prominent Players Market Company Overview

Table 34      Other Prominent Players Market Financial Overview