India's MSME Sector: The Dynamic Force Steering National Economic Growth

The Micro, Small, and Medium Enterprises (MSME) sector has become a cornerstone of India's economic growth, contributing 30.1% to the Gross Value Added (GVA) in the fiscal year 2022-2023. Soumya Kanti Ghosh, Group Chief Economic Advisor at SBI and member of the Prime Minister's Economic Advisory Council, emphasized this sector's growing significance at the India SME Finance and Summit, noting a rise from 27.3% in 2021 as a testament to its resilience.

Integration into global trade has accelerated, with MSME products making up 45.73% of India's exports by 2024-2025. The sector has seen an export value jump from 3.95 lakh crore in 2021 to 12.4 trillion, and the number of exporting MSMEs tripled to 1,76,315 units by 2024-2025. Such growth positions MSMEs as pivotal in India's export capabilities, with their contribution rising from 43.5% in 2022-2023 to 45.79% in 2024-2025.

Ghosh pointed out the move toward transparent regulations, facilitated by the GST's implementation and turnover-based criteria for MSME classification. Now covering retail and wholesale trades, the sector's formalization is boosted by digital registrations, which surged to 7.7 crore. This growth is majorly led by micro-enterprises, constituting 99% of total registrations. Remarkably, the sector, inclusive of 40% women-owned businesses, has created 34 crore jobs, being comparable to SMEs' impact in the USA.