To encourage and incentivize small businesses, the government has provided classification to certain businesses as MSME businesses. Also known as Micro, Small, and Medium Enterprises, MSMEs in India have always remained a significant contributor to the economy. The share of the MSME businesses in India’s Gross Domestic Product (GDP) for the financial year 2021-22 was 29.2%. This highlights the importance of MSME businesses in the overall growth and development of the nation. You need to obtain UDYAM registration to be classified as an MSME business. But why you should obtain MSME registration? What are its benefits? Let’s find out!
Before checking out the MSME list of companies, here’s why you should obtain MSME registration in India:
To support MSME enterprises, the government has released various financing schemes. These schemes are aimed at providing affordable loans to MSME businesses without any collateral security requirement. Some of these schemes include Mudra Loans, Credit Guarantee Scheme, etc.
Many banks and financial institutions provide affordable loans to MSME businesses. These loans come at low interest rates, have simple eligibility criteria, and are collateral-free.
The government has also made intellectual property registrations affordable for MSME enterprises by providing them concessions in governmental fees. Whether it's about patents or trademarks, you can apply for intellectual property registrations at a concessional cost if you are a registered MSME enterprise.
The government has incorporated numerous provisions to help MSME enterprises conduct businesses seamlessly. For instance, MSME law requires businesses to make MSME payments within 45 days. Further, it also provides for penal interest at three times the bank rate in case of delayed payments. Also, income tax law disallows expenses if payments of MSME businesses are outstanding.
If you fall in one of the below categories, then you can apply for MSME registration with the Ministry of MSME:
Business Category |
Investment in Plant and Machinery |
Annual Turnover |
Micro |
Investment of up to ₹1 crore |
Annual turnover less than ₹5 crores |
Small |
Investment between ₹1 crore and ₹10 crore |
Annual turnover between ₹5 crores and ₹50 crores |
Medium |
Investment between ₹10 crores and ₹50 crores |
Annual turnover between ₹50 crores and ₹250 crores |
MSME registration in India confers a lot of benefits among businesses. While the government has set the eligibility criteria based on investment and turnover requirements, are all businesses eligible for MSME registration?
The MSME sector covers most of the businesses in India. Here’s the MSME list of businesses:
Leather products
Moulding of products like combs, umbrella frames, plastic toys, etc.
Natural fragrance and flavours
Electronic surveillance and security
Automotive electronic component products
Retail trade businesses requiring low capital
Training and educational institute
STD/ISD booths
Servicing agricultural farm equipment including tractor, pump repairing, ring boring machine
IT solutions like creating a server bank, application service provider, smart card customisation, etc.
Placement and management consultancy services
Back-office operation relating to computerised data
Xeroxing
Channels dish cable TV with dish antenna
Laundry and dry cleaning
Beauty parlour and crèches
Recorders, VCRs, radios, transformers, motors, watches
Photographic lab
Toughened metallic ware
Mechanical engineering like steel almirahs, cocks, and valves, wire cutters, etc.
Energy efficient pumps
Micronutrients for plants
Engineering and fabrication
Handicraft activities like spinning, weaving, artisans
Active pharmaceutical ingredients and Ayurvedic products
Equipment rental and leasing
Khadi products and hosiery products
Auto repair services, and garages
Printing and other products made of paper
Coir industry
Furniture and wood products
Poultry farm
Bicycle parts
Auto businesses such as auto parts components like horn buttons, door channels, wiper blade components, battery cell tester
Call Centre
X-ray clinics
Rubber products
Stationery items
Ceramics and glass products include roofing tiles, glass flooring tiles, granite, etc.
Testing labs for industries
Retail and wholesale businesses
Obtaining MSME registration in India can unlock the doors for multiple benefits in India. Affordable loans, government schemes, and concessional IP registrations are some of the many benefits that MSME businesses enjoy. However, it is important to obtain Udyam registration to obtain these benefits. UDYAM is the official MSME registration certificate granted by the Ministry of Micro, Small, and Medium Enterprises in India.
Having obtained MSME registration, you can apply for secured business loans with IIFL Home Loans. Being a pioneering financial institution, IIFL Home Loans provides affordable business loans with simple-to-fulfil eligibility criteria and quick processing. Apply for a secured business loan now!
Ans: Yes. The following sectors do not fall under the MSME category list:
Betting and gambling activities
Aquaculture and fishing
Trading and repairing motorcycles
Logging and forestry
Activities of households for domestic personnel
Retail trade except for vehicles and motorcycles
Activities of extraterritorial organisations and bodies
Goods and services produced via private households for personal use
Ans: You can obtain an MSME certificate by applying for UDYAM registration in India. You can apply for the UDYAM registration by visiting the MSME registration portal.
Ans: There are no government fees for MSME UDYAM registration.
Ans: UDYAM certificate is generated immediately after you apply for UDYAM registration.
Ans: Yes, you can revise your MSME UDYAM registration details.
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