MSME Definition

For further details on below queries, you may please visit www.dcmsme.gov.in

1. What is MSME?

Micro, Small, and Medium Enterprises (MSMEs) are businesses characterised by specific thresholds of investment in equipment and annual turnover. They operate across manufacturing, services, and trade sectors. MSMEs are critical to India’s economic framework, generating employment, encouraging entrepreneurship, and fostering innovation. Originally governed by the MSMED Act of 2006, the classification criteria have evolved over time to better accommodate modern business realities.


In the Union Budget 2025, the Government of India announced a significant revision to the MSME classification criteria. Specifically, investment limits have been increased by 2.5 times, and turnover limits have been doubled. This expansion aims to empower MSMEs to scale up without losing out on crucial benefits and incentives, thus driving broader economic growth and employment.


Below is a quick snapshot of the revised criteria as per the Union Budget 2025:

Enterprise Category Current Investment Limit Revised Investment Limit Current Turnover Limit Revised Turnover Limit
Micro Enterprise ₹ 1 crore ₹ 2.5 crore ₹ 5 crore ₹ 10 crore
Small Enterprise ₹ 10 crore ₹ 25 crore ₹ 50 crore ₹ 100 crore
Medium Enterprise ₹ 50 crore ₹ 125 crore ₹ 250 crore ₹ 500 crore

When Will the MSME New Definition 2025 Be Effective ?

The revised MSME definition, as announced in the Union Budget 2025, may come into effect from April 1, 2025. Once implemented, the updated investment and turnover limits will be used to classify businesses as Micro, Small, or Medium Enterprises.


What Do These Changes Mean ?


MSME Classification Latest: Key Highlights

The MSME classification latest revision is significant for both new entrants and existing businesses:


Benefits of the New MSME Classification

The new MSME classification provides tangible advantages for businesses: