Revised definition of (MSME) Micro Small and Medium Enterprises 2025

Revised MSME definition w.e.f. 01 April 2025

Revised MSME definition 2025

S.O. 1364(E).—In exercise of the powers conferred by sub-section (1) read with sub-section (9) of section 7 and sub-section (2) read with sub-section (3) of section 8 of the ‘Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006)’, the Central Government after obtaining the recommendations of the Advisory Committee in this behalf hereby makes the following amendments in the notification of Government of India, Ministry of Micro, Small and Medium Enterprises number S.O. 2119 (E), dated the 26th June, 2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, sub-section (ii), dated the 26th June, 2020, namely:-
1. In the said notification in paragraph 1,–

(i) in clause (i),-

(a) for the words “one crore”, the words “ two crore and fifty lakh” shall be substituted;
(b) for the words “five crore”, the words” ten crore” shall be substituted;

(ii) in clause (ii),-

(a) for the words “ten crore”, the words “twenty five crore” shall be substituted;
(b) for the words “fifty crore”, the words “one hundred crore” shall be substituted;

(iii) in clause (iii),-

(a) for the words “fifty crore”, the words “one hundred twenty five crore”, shall be substituted;
(b) for the words “two hundred and fifty crore”, the words “five hundred crore” shall be substituted;

2. This notification shall come into force with effect from the 1st day of April, 2025.

Revised MSME classification as per Budget 2025:

Revised MSME Classification
Composite Criteria: Investment and annual turnover
Classification & Criteria Existing Limit (in Crore) Revised Limit (in Crore)
Investment Turnover Investment Turnover
Micro <1.00 <5.00 <2.50 <10.00
Small <10.00 <50.00 <25.00 <100.00
Medium <50.00 <250.00 <125.00 <500.00

Note :

  1. Investment and Turnover both need to be satisfied.
  2. The revised MSME definition as per Budget 2025 is notified by Notification NO S.O 1364(E)  dated 21st March 2025.
  3.  “<” means less than. E.g. Entity with investment less than 01 cr and turnover less than 5cr is micro unit.
Revised MSME Classification will be applicable w.e.f 01st April 2025

MSME Definition between 01st July 2020 to 31st March 2025

Delivering the economic package, part of the Aatmanirbhar Bharat Abhiyaan, Finance Minister announced revisions in the definition of Micro Small and Medium Enterprises (MSME) on May 13, 2020. However based on representation from industry, a special meeting of Cabinet Committee on Economic Affairs (CCEA) held on June 01,2020 approve further upper revision in the definition of MSME. Earlier, the MSMEs were defined on the basis of investments put in, now the revised definitions will also include turnover of the company. Three parts of the revised MSME definition are :
  • Investment limit for MSME increased
  • Additional criteria of turnover size for recognition of MSME introduced
  • Distinction between manufacturing and service MSME removed
  • Export turnover will not be counted in the limits of turnover for any category of MSME units whether micro, small or medium.
  • The revision in the definition of MSME is done after 14 years.
The definition of micro manufacturing and services unit increased to ₹1 crore of investment and ₹5 crore of turnover. The limit of small unit increased to ₹10 crore of investment and ₹50 crore of turnover. The limit for medium manufacturing and service units will be ₹50 crore of investment and ₹250 crore of turnover. Notification S.O. 1702(E) dated 01/06/2020 of revised MSME definition from July 2020.

MSME registration applicable to traders? Read here MSME / Udyam registration for Traders

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