MSMEs drive growth: 31.4% GDP share, ₹18.6L Cr exports in FY25

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Synopsis

India’s MSMEs strengthen their economic role, with FY25 marking a 31.4% GDP share, tripled exports since FY20, and a sharp drop in NPA levels.

Summary

India’s micro, small and medium enterprises (MSMEs) have significantly deepened their contribution to the national economy, according to Union MSME Minister Narayan Rane. As per the latest data, the sector’s share in India’s GDP has reached 31.4% in FY25, up from 29.3% in FY19 and 30.5% in FY22, reinforcing MSMEs’ role in economic expansion, job creation, and decentralised growth.

Exports from MSMEs have seen robust growth — rising from ₹10.5 lakh crore in FY20 to ₹18.6 lakh crore in FY25, registering nearly a 3x increase in five years. This surge has been attributed to production-linked incentives, greater digital enablement, and global supply chain diversification benefiting Indian manufacturers. MSMEs in textiles, food processing, and light engineering have led the export momentum.

In a further sign of sectoral health, the proportion of non-performing assets (NPAs) in MSME lending has declined. From 9.3% in March 2022, the NPA ratio dropped to 8.4% in March 2023, with expectations of further improvement in FY25. Improved credit monitoring, restructuring options, and digital lending models have contributed to better repayment discipline.

At a recent MSME event in Chennai, the Minister also highlighted Tamil Nadu’s leadership, with over 22 lakh registered MSMEs, the highest in India. He called for more support to enable MSMEs to embrace automation, sustainability, and global compliance standards.

With over 11 crore people employed across 6.4 crore enterprises, the sector’s rising export performance, improved credit metrics, and growing GDP share point to a resilient growth story. MSMEs are now seen as not just job providers but also innovation hubs and export enablers in India’s long-term economic roadmap.