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MSME stands for Micro, Small and Medium Enterprises. The MSME sector has emerged as a dynamic sector of the Indian economy over the last five decades. MSMEs contribute enormously to the socio-economic development of the country. MSME have a large share of jobs, production and exports. The primary responsibility of promotion and development of MSMEs is of the State Governments. However, the Government of India, supplements the efforts of the State Governments through various initiatives.
Micro, Small and Medium sized enterprises in both the manufacturing and service sector can obtain MSME Registration under the MSMED Act. Though the MSME registration is not statutory, it is beneficial for business at it provides a range of benefits such as eligibility for lower rates of interest, excise exemption scheme, tax subsidies, power tariff subsidies, capital investment subsidies and other support.

MSME’s are classified into 2 categories:

– Manufacturing Enterprise
– Service Enterprise

Below is the classification in terms of investment:


Manufacturing Sector Service Sector
Enterprises Investment in plant & machinery Enterprises Investment in equipment
Micro Enterprises Does not exceed Rs. 25 Lakh Micro Enterprises Does not exceed Rs. 10 Lakh
Small Enterprises More than Rs. 25 Lakh but does not exceed Rs. 5 Crore Small Enterprises More than Rs. 10 Lakh but does not exceed Rs. 2 Crore

It covers companies, Partnership firm, Association of Person, Hindu Undivided family, Co-operative Society, Proprietorship Firm, other entities etc.

Documents for MSME Registration:

– Personal Adhaar Card
– Industry name
– Address
– Bank account details
– Pan card

Benefits of MSME Registration:

1. No collateral on loans:

MSME registered companies don’t need to pay security to obtain the loan from banks.

2. Subsidy in patent registration:

There is a 50 % subsidy in patent registration for the MSMEs

3. Subsidy in Trademark registration:

There is a 50 % subsidy in trademark registration for the MSMEs
4. Access to Industrial promotion subsidy:

Under the Industrial promotion plan, the MSMEs enjoy a lot of subsidies when they wish to improve their equipment.

5. Electricity bill Concessions:

MSMEs can get concessions in their electricity bill.

6. Low-cost ISO certification:

An MSME can ask for reimbursement for the charges of ISO certification.

7. Access to tenders :

There are multiple government tenders which are open only to MSMEs to promote small business participation in the India.