The Economic Survey 2025–26, presented by Nirmala Sitharaman, states that Micro, Small, and Medium Enterprises (MSMEs) are the backbone of India’s industrial economy. The sector contributes about 35.4% to manufacturing, 48.58% to exports, and 31.1% to GDP. India has more than 7.47 crore MSMEs, employing over 32.82 crore people, making it the second-largest employer after agriculture. Globally also, MSMEs play a major role, accounting for nearly 90% of businesses and over 50% of employment, which shows their importance in economic growth and job creation.
MSME Credit Driving Growth
The survey highlights that MSME credit has remained strong and is the main driver of industrial credit growth during H1FY26. Credit growth for Micro and Small Enterprises increased from 14.7% in March 2024 to 20.9% in August 2025, while total MSME credit growth reached 18.5% during the same period. In comparison, credit growth for large industries remained much lower at 1.8% in August 2025, showing that MSMEs are leading the expansion of industrial credit in India.
Government Support and Market Expansion
The SME public markets have grown rapidly in recent years due to strong market conditions and increased participation of retail investors through digital platforms. The Self-Reliant India (SRI) Fund has supported 682 MSMEs with investments worth ₹15,442 crore as of 30 November 2025. The government is also encouraging innovation through incubation support, design improvements, and protection of intellectual property rights, which is helping MSMEs become more competitive.
Global Potential and Future Strategy
India currently contributes around 2.9% to global manufacturing output and 1.8% to global exports, indicating strong potential for growth. The survey suggests that India should increase its participation in global supply chains, especially in labour-intensive sectors, to create more jobs and support the vision of Viksit Bharat@2047. It also emphasizes the need to focus on advanced manufacturing, innovation, infrastructure, and digital governance. By maintaining high quality, competitive pricing, and efficient delivery, MSMEs can play a key role in making India a strong and developed economy.