Introduction
The micro, small, and medium enterprises (MSMEs) sector in India has seen an extraordinary growth trajectory over the past few years, cementing its position as a cornerstone of the nation’s economy. According to the Ministry of Micro, Small and Medium Enterprises, the number of Exporting MSMEs Up from 52849 in 2020-21 to an impressive 1,73,350 in 2024-25. This remarkable progress not only underscores the resilience of the sector but also highlights its pivotal role in strengthening India’s global trade presence.
Key Highlights of MSME Export Growth
- Export Volume: MSMEs’ export volume increased from ₹3.95 lakh crore in 2020-21 to ₹12.39 lakh crore in 2024-25.
- Contribution to Exports: MSMEs contributed 45.73% to India’s total exports in 2023-24, which further climbed to 45.79% by May 2024.
- Economic Impact: The gross value added (GVA) by MSMEs to India’s GDP grew from 29.7% in 2017-18 to 30.1% in 2022-23.
MSMEs: A Backbone of Economic Resilience
Despite challenges posed by the COVID-19 pandemic, the MSME sector demonstrated unwavering resilience. In 2020-21, amid the pandemic, MSMEs sustained a 27.3% contribution to India’s GDP. This figure rebounded strongly to 29.6% in 2021-22, reflecting the sector’s adaptive capabilities and its critical role in economic stability.
Transition of Enterprises
Between July 1, 2020, and July 24, 2024, numerous enterprises transitioned to higher categories, showcasing the dynamism within the MSME ecosystem:
- 2020-21 to 2021-22:
- 714 micro enterprises scaled up to medium enterprises.
- 3,701 small enterprises upgraded to medium enterprises.
- 2023-24 to 2024-25:
- 2,372 micro enterprises and 17,745 small enterprises scaled up to medium enterprises.
Driving Factors Behind MSME Growth
Several factors contributed to the robust growth of MSMEs:
- Policy Support: Government initiatives like the “Atmanirbhar Bharat Abhiyaan” and the revised MSME definition have provided a conducive environment for growth.
- Digital Transformation: Adoption of digital tools and e-commerce platforms has expanded market access.
- Access to Finance: Enhanced credit schemes, including the Emergency Credit Line Guarantee Scheme (ECLGS), have bolstered liquidity.
- Focus on Exports: Dedicated programs and incentives for exporters have incentivized international trade.
Role of MSMEs in Employment and Entrepreneurship
MSMEs remain pivotal to employment generation, contributing significantly to job creation and entrepreneurship promotion. The sector’s expansion has led to:
- Increased Employment: Millions of jobs generated annually across urban and rural areas.
- Entrepreneurial Growth: Encouragement of innovative business models, fostering self-reliance and economic development.
Vision for the Future
As India strides towards becoming a global economic powerhouse, the MSME sector is expected to play an even larger role. The government’s focus remains on fostering innovation, improving competitiveness, and ensuring sustainable growth for MSMEs. Key areas of emphasis include:
- Technology Upgradation: Encouraging MSMEs to adopt advanced technologies.
- Global Integration: Strengthening participation in global value chains.
- Skill Development: Upskilling the workforce to meet evolving market demands.
Conclusion
The journey of India’s MSMEs from 52,849 exporting units in 2020-21 to 1,73,350 in 2024-25 is a testament to the sector’s resilience and transformative potential. With their growing contribution to exports and the economy, MSMEs are truly the backbone of India’s economic landscape. By continuing to support this sector, India is poised to achieve greater heights in global trade and economic growth.