List of Businesses That Come Under the MSME Sector

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The MSME sector contributes to over 30% of the country's GDP, making it the backbone of the Indian economy. As the MSME business list crosses 65 million, it becomes one of the major employer generators in the country. Moreover, these enterprises qualify for various government subsidies and benefits. So, understanding the classification of MSMEs becomes important to understand their contribution and benefits.

Businesses List Come Under MSME

As the MSME full form suggests, the MSME list of companies includes all micro, small, and medium enterprises. The government’s classification of micro, small, and medium enterprises covers all business activities, including services and manufacturing, according to their investment and turnover. However, there are certain exceptions. Broadly, the MSME sector falls under two categories:

Manufacturing Sector: MSME industries in the manufacturing sector produce MSME products from raw materials, contributing 45% to the nation’s total manufacturing output and 40% to total exports. These include companies that manufacture goods by assembling pieces and transforming raw materials into finished products.
Service Sector: The Udyam portal identifies more MSMEs in the service sector than those in the manufacturing sector. Although both are eligible for Udyam MSME registration benefits, there are 5.37 Lakh enterprises in the manufacturing sector compared to 8.65 Lakh in the service sector. These include consultancy services, legal and accounting firms, hospitality, healthcare, wellness, exercise services, educational institutes, security services, etc.

Also Read: 6 Benefits Of Taking A Business Loan

Government's Classification Criteria for MSMEs

The government has specific criteria to classify an MSME organisation. The micro category includes any enterprise that invested less than Rs. 1 Crore in plant, equipment, and machinery. A business that invested Rs. 1 to 5 Crore is categorised as a small enterprise, while a company with an investment of Rs. 5 to 10 Crore is a medium enterprise.

The government also considers their annual turnover to classify companies as micro, small, or medium enterprises. According to the MSMED Act 2006, a company with a yearly turnover of less than Rs. 5 Crore is a micro-enterprise; one with a turnover of over Rs. 50 Crore is a small enterprise, while a medium enterprise has an annual turnover of over Rs. 250 Crore.

Here is the MSME industries list with examples of businesses in various sectors:

Leather products	Printing and other products made of paper
Natural fragrance and flavours	Recorders, VCRs, radios, transformers, motors, watches
Energy efficient pumps	Laundry and dry cleaning
Beauty parlour and crèches	Active pharmaceutical ingredients and Ayurvedic products
Training and educational institutes	Handicraft activities like spinning, weaving, artisans
Auto repair services and garages	Furniture and wood products
Placement and management consultancy services	Coir industry
Equipment rental and leasing	Rubber products
STD/ISD booths	IT solutions include application service providers, server bank creation, smart card customisation, etc.
Servicing agricultural farm equipment including pump, tractor, ring boring machine, repairing	Auto businesses such as auto parts components like horn buttons, door channels, wiper blade components, battery cell tester
Multi-channel dish cable TV with dish antenna	Ceramics and glass products include roofing tiles, glass flooring tiles, granite, etc.
Automotive electronic component products	Photographic lab
Electronic surveillance and security	Back-office operation relating to computerised data
Engineering and fabrication	Moulding of products like combs, umbrella frames, plastic toys, etc.
Mechanical engineering like steel almirahs, cocks, and valves, wire cutters, etc.	Call centres

What are the Businesses that Do Not Come under MSME?

According to the MSME Ministry, organisations that do not directly deal with goods manufacturing or service delivery do not fall under the small business categories list. These include betting and gambling activities, logging and forestry, fishing and aquaculture, motorcycle repair or trade, household activities for domestic personnel, extraterritorial organisations, and goods and services that households produce for personal use.

What Factors Contribute to the Success and Growth of MSMEs in India?

Several factors contribute to the success and growth of an MSME business. These factors include the SME's customer and marketplace, characteristics, management, know-how, strategy, external environment, resources, finances, and how it conducts business and cooperation. Understanding these factors helps entrepreneurs give a good start to the company, increase success chances, and reduce the failure risk.

Also Read: CGTMSE Scheme - Loan, Fee, Full Form, Eligibility

Understanding the NIC Code: What Does It Mean?

Companies falling in the MSME list of companies must register with the Udyam site, based on which they receive an NIC code. It stands for National Industrial Classification Code (NIC), the Udyog Aadhaar registration code that companies falling in the small-scale industries list require for filing the company's registration. A 2-3 digit number represents the business’s type of activities; a 4-digit code represents the class of business activity; a 5-digit code represents the business activity’s subclass.

How Do You Grow Your Business?

Classifying a company in the MSME list of businesses helps to avail of various government benefits and access a Business Loan. The MSME industry in India is constantly evolving. Companies fulfilling the Business Loan requirements can easily source the required funding to take their business to the next level. Borrowers coming under the list of small and medium enterprises in India can use the loan amount to cover their operational and working capital-related activities, such as hiring staff, purchasing equipment and raw materials, setting up the workplace, building working capital, etc.