New Delhi: The Economic Survey 2025–26 described micro, small and medium enterprises as the backbone of India’s industrial economy and highlighted their role in growth and jobs.
Union Finance and Corporate Affairs Minister Nirmala Sitharaman tabled the Survey in Parliament on Thursday. It said the MSME industrial economy contributed 35.4 per cent of manufacturing output. It also accounted for 48.58 per cent of exports and 31.1 per cent of GDP.
Moreover, the Survey noted that the sector comprised over 7.47 crore enterprises. These units employed more than 32.82 crore people across the country. As a result, MSMEs remained the second-largest employer after agriculture.
The Survey said MSMEs gained importance as India moved towards global manufacturing integration. In addition, the sector enabled supply-chain participation and local value addition. It also supported balanced regional development. Globally, MSMEs made up nearly 90 per cent of businesses and generated over half of total employment.
The Economic Survey further pointed to strong credit momentum. According to it, government measures improved access to finance. Consequently, MSME credit continued to grow at a steady pace.
MSME credit and investment drive industrial expansion
Importantly, the Survey said MSME credit led industrial credit growth during the first half of FY26. Year-on-year credit growth for MSMEs exceeded that of large industries. This trend reflected rising confidence among small enterprises.
Meanwhile, SME public markets expanded sharply over the past two years. The Survey attributed this growth to favourable market conditions. It also cited higher digital retail participation as a key factor.
The Survey highlighted policy support through the Self-Reliant India Fund. The fund invested ₹15,442 crore in 682 MSMEs as of 30 November 2025. In parallel, the MSME-Innovative component supported incubation, design and intellectual property protection.
India accounted for 2.9 per cent of global manufacturing GVA in 2024. It also contributed 1.8 per cent of global merchandise exports. Therefore, the Survey said deeper supply-chain integration could expand the MSME industrial economy under the Viksit Bharat@2047 vision.
Finally, the Survey stressed the need to strengthen advanced manufacturing. It said research-led innovation would raise competitiveness. It also called for sustained focus on the national manufacturing mission to build long-term capacity.
