MSMEs: Core of India’s Global Growth Strategy

The Union Budget 2026-27 places Micro, Small and Medium Enterprises (MSMEs) at the centre of India’s growth strategy with a major focus on competitiveness, exports, employment and financing support.

The Budget introduces a three-pronged strategy covering equity support, liquidity support, and professional support to help MSMEs emerge as globally competitive enterprises.

Aspect	Details
SME Growth Fund	A dedicated Rs. 10,000 crore SME Growth Fund has been announced to create future MSME champions through eligibility-based incentives.
SRI Fund Expansion	The Self-Reliant India (SRI) Fund, established in 2021, will receive an additional Rs. 2,000 crore to support micro enterprises and improve access to risk capital.
TReDS Platform	More than Rs. 7 lakh crore has already been unlocked for MSMEs through the Trade Receivables Discounting System (TReDS).
Mandatory TReDS Usage	TReDS will be made the settlement platform for all purchases from MSMEs by Central Public Sector Enterprises (CPSEs).
CGTMSE Support	The Budget proposes Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)-backed credit guarantee support for MSMEs.
GeM Integration	The Government e-Marketplace (GeM) will be integrated with TReDS to improve information-sharing between government buyers and financiers.
Asset-Backed Securities	TReDS receivables will be introduced as asset-backed securities to deepen the secondary market for MSME financing.
Corporate Mitras	Professional institutions will develop short modular courses to train “Corporate Mitras” in Tier-II and Tier-III towns.
MSME Scale	India’s MSME sector comprises more than 7.47 crore enterprises and supports livelihoods for over 32.82 crore people.
Economic Contribution	MSMEs contribute around 31.1% of GDP, 35.4% of manufacturing output, and approximately 48.58% of India’s exports.
Employment Role	The MSME sector remains India’s second-largest employer after agriculture.

PT Facts

MSMED Act: MSMEs are governed under the MSMED Act, 2006.
TReDS: Electronic platform for financing MSME trade receivables.
GeM: National public procurement portal for government buyers.
CGTMSE: Provides collateral-free credit guarantee support to micro and small enterprises.
CPSEs: Central Public Sector Enterprises are government-owned corporations.
Global Trade Role: MSMEs account for nearly half of India’s exports.

Source:

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