Government Eyes Fresh Policy Push to Strengthen MSME Manufacturing Base
Something’s shifting in how India’s micro, small and medium enterprises are being treated on the policy front. A fresh round of schemes is taking shape, touching manufacturing, exports and the green transition all at once.
Mercy Epao, Joint Secretary at the Ministry of MSME, spelt out where this is headed on the sidelines of a FICCI event this week. Her point was fairly blunt: intervention is coming, new schemes are coming, and the sector’s weight in national growth is what’s pushing it all forward.
A Green Push for Small Manufacturers
Sustainability is one piece of this puzzle. The scheme, GIFT, is built to steer MSMEs toward cleaner energy and less wasteful production.
Epao connected it to India’s 2030 climate goals, arguing smaller manufacturers have little time left to modernise. In practice, that could mean equipment financing or a move to leaner, less energy-hungry processes.
Building Industry 4.0 Readiness
Then there’s the tech side. The ministry’s backing Industry 4.0 adoption through its Technology Centres, with NIMSME in Hyderabad handling a good chunk of the training.
This isn’t just talk, either. Workers on the shop floor are being trained to run modern machinery and digital tools — the goal being a workforce that works alongside newer technology, not one that gets left behind by it.
A Dedicated Export Centre in the Works
Exports are getting attention too. There’s a proposal on the table for a dedicated MSME Export Centre, to be based at NIMSME in Hyderabad, which would serve as a single point of contact for smaller firms trying to break into overseas markets.
That proposal has already cleared approval, apparently, though it’ll likely be another two years before it’s up and running. Once it is, the centre’s job will be to walk MSMEs through documentation, point them toward the right overseas markets, and clarify whatever standards and certifications a given destination demands.
The logic behind it comes down to sheer scale. MSMEs contribute close to half of India’s exports, even though export policy officially falls under the Commerce Ministry’s remit. Epao argued that a dedicated resource for smaller exporters plugs a real gap — regardless of whose mandate it technically sits under.
Trade Agreements and Emerging Markets
There’s also a push to get MSMEs making better use of India’s Free Trade Agreements, along with platforms like BRICS. After last month’s BRICS SME Forum in Agra, conversations apparently surfaced a fair amount of untapped export potential for Indian MSMEs across BRICS member and partner countries.
To make life easier for first-time exporters specifically, the ministry’s now reimbursing costs like Export Promotion Council registration, export insurance premiums and product certification. These are exactly the kind of upfront costs that tend to scare smaller firms off attempting exports in the first place.
Working Capital Remains a Sticking Point
Separately, export finance has come up as something worth digging into further. Here’s the issue: MSME exporters generally have to pay their domestic suppliers within 45 days, but export proceeds often don’t land until well after goods arrive at their destination — sometimes leaving a gap of nearly 90 days.
Bharat Khera, Secretary for MSMEs, brought this up at a separate CII event, floating the idea that the ministry could work with the Department of Financial Services and export councils to figure out a financing mechanism. Nothing’s been finalised yet, but the fact that it’s being acknowledged at all hints at where things might go next.
Credit Access Has Already Improved
Meanwhile, the lending landscape has changed quite a bit over the last decade. Bank credit to MSMEs has climbed from around ₹10 trillion ten years ago to nearly ₹37 trillion now, according to Khera.
The Credit Guarantee Scheme for Micro and Small Enterprises has backed guarantees worth close to ₹13 trillion. The Emergency Credit Line Guarantee Scheme, meanwhile, has disbursed over ₹1 trillion, helping firms weather liquidity crunches linked to recent disruptions — the West Asia conflict among them. On the equity front, the Self-Reliant India Fund has leveraged roughly ₹58,000 crore in investment.
A Formalisation Drive Behind the Numbers
A lot of this ties back to a broader formalisation effort. Udyam portal registrations have jumped from 16 million enterprises three years ago to around 88.4 million today — a fivefold increase, driven largely by simpler compliance rules and revised MSME classification thresholds.
Conclusion
Sorting Through Thousands of Recommendations
Behind all of this sits a fairly large consultation exercise. The ministry gathered more than 2,000 recommendations from MSMEs and industry bodies, and it’s now working through them, sorting them into categories.
Epao was quick to caution that none of it’s been finalised at a national level yet, so it’d be premature to read any of it as confirmed policy. The exercise is still ongoing, feeding into the government’s wider ambition of strengthening India’s manufacturing base.
Put it all together, and there’s a clear tilt toward more targeted, sector-specific support rather than one-size-fits-all schemes. Whether it actually moves the needle for manufacturers, though, comes down to how fast things like the Export Centre and the export finance window go from proposal to reality.
