{"id":5122,"date":"2022-12-06T12:17:58","date_gmt":"2022-12-06T12:17:58","guid":{"rendered":"https:\/\/www.indusind.bank.in\/iblogs\/?p=5122"},"modified":"2025-09-01T10:59:12","modified_gmt":"2025-09-01T10:59:12","slug":"msme-guide-which-businesses-fall-under-msme-and-which-dont-see-full-list","status":"publish","type":"post","link":"https:\/\/www.indusind.bank.in\/iblogs\/msme\/msme-guide-which-businesses-fall-under-msme-and-which-dont-see-full-list\/","title":{"rendered":"MSME Guide: Which businesses fall under MSME, and which don\u2019t. See full list!"},"content":{"rendered":"\n

The MSME, or the micro, small and medium enterprises are considered the backbone of the Indian economy<\/a>. The contribution of MSMEs in accelerating the economic growth of the nation has increased manifold in the last 5 years. In 2019-2020, the contribution of Indian MSMEs in the India\u2019s GDP<\/a> stood at a whopping 30 per cent. The MSME ministry expects this share to grow further. <\/p>\n\n\n\n

For developing nations like India, MSMEs play a vital role in eliminating the rural \u2013 urban disparity, providing employment opportunities, and supporting equitable growth. As per the data available on the MSME registration portal Udyam<\/a>, India has registered 1.24 crore MSMEs till December 2022, which jointly employ 9.12 crore people. Over 23 per cent of these are women employees.  <\/p>\n\n\n\n

In cognizance of the crucial role of MSMEs, the government of India has put a very strong handholding mechanism for MSMEs and new entrepreneurs. Ministry of MSME has a number of schemes and programmes to support and elevate small businesses. <\/p>\n\n\n\n

How does the government categorize MSMEs?<\/strong> <\/h2>\n\n\n\n

On the basis of Investment, any enterprise whose investment in the plant, machinery or equipment is less than Rs. 1 crore will fall in the micro enterprise category. If the investment in the plant, machinery or equipment is between Rs. 1 to 5 crore, it will be considered a small enterprise. To qualify as a macro enterprise, the investment in the same has to be between Rs. 5 to 10 crore. <\/p>\n\n\n\n

Enterprises can be categorized into the micro, small and medium category on the basis on annual turnover as well. If the yearly turnover of the business is below Rs. 5 crore, it will be a small enterprise. If the turnover is over Rs. 50 crores, it will fall under the small enterprise category. For businesses with more than Rs. 250 crore turnover, the medium enterprise category is applicable. The criterion is based on the MSMED Act, 2006.<\/a> <\/p>\n\n\n\n

What kind of businesses fall under MSME?<\/strong> <\/h3>\n\n\n\n

The government of India states that \u2018all business activities – services and manufacturing are covered in MSME sector\u2019 as long as they meet the investment and turnover criterion mentioned above.<\/em> However, there are certain exceptions to this as well, which we have listed out for you later in the article. (<\/em>Source<\/em><\/a>)<\/em> <\/p>\n\n\n\n

Manufacturing business activities \u2013 <\/strong>Manufacturing business activities (producing finished goods from raw products) in the MSME segment contribute to 45 per cent of the total manufacturing output and 40 per cent of total exports. Combined with the collective attempt to popularize the ‘Made in India’ campaign within the country and globally, this share will only go upwards. <\/p>\n\n\n\n

Service sector business activities <\/strong>– An analysis of the Udyam MSME registration portal shows that MSMEs in service sector comprise a larger proportion of as compared to those MSMEs in manufacturing sector. Indian entrepreneurs have registered over 5.37 lakh enterprises under the manufacturing category and 8.65 lakh enterprises under the service sector. <\/p>\n\n\n\n

Here is a broad list of services and businesses shared on multiple financial portals that qualify as MSMEs<\/em>:<\/p>\n\n\n\n

Leather goods industry related businesses <\/td>Electronic Security services <\/td><\/tr>
Moulding industry related businesses  <\/td>Manufacturing of almirahs, steel cocks <\/td><\/tr>
Natural fragrance industry related businesses <\/td>Engineering and Fabrication <\/td><\/tr>
Placement services <\/td>Dealers of small white goods <\/td><\/tr>
Training institutions <\/td>Ayurvedic products <\/td><\/tr>
Beauty parlour services <\/td>Khadi materials and products <\/td><\/tr>
Cr\u00e8ches services <\/td>Handicrafts – spinning and weaving <\/td><\/tr>
Garages for auto repair <\/td>Coir Industry <\/td><\/tr>
X-Ray clinics <\/td>Manufacture furniture and wood products <\/td><\/tr>
Tailoring units <\/td>Poultry Farming <\/td><\/tr>
Equipment rental <\/td>Bicycle parts sales and service <\/td><\/tr>
Photo labs <\/td>Stationery Items <\/td><\/tr>
Repairs of agricultural machinery <\/td>Call centres <\/td><\/tr>
Computer-based data processing businesses <\/td>Rubber products <\/td><\/tr>
STD\/ISD booths <\/td>Service provider for IT-enabled service <\/td><\/tr>
Retail trading <\/td>Testing Labs for industries <\/td><\/tr>
Laundry services <\/td>Sales of auto parts components <\/td><\/tr>
Toughened Metallic Ware <\/td>Sales of ceramics and glass products <\/td><\/tr>
Automotive Electronic Component products <\/td>Retail and wholesale business <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Businesses that do not fall under MSME<\/strong> <\/h4>\n\n\n\n

The MSME Ministry has stated via a notification<\/a> that the following activities are not covered under MSMED Act, 2006: <\/p>\n\n\n\n