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The MSME sector has responded positively to the Union Budget 2025-26, with experts highlighting the impact of increased investment and turnover limits. Industry leaders believe the government’s decision will enable small businesses to expand operations, contribute more to manufacturing and exports, and boost overall economic activity. Meanwhile, the expansion of the E-Shram scheme is being recognized as a step toward improving social security and upskilling opportunities for gig workers in a rapidly evolving job market.
Read the Union budget reactions from MSMEs sector in detail:
Eswara Rao Nandam, CEO and Founder, Polymatech Electronics
The Government of India’s commitment to empowering MSMEs and driving technological upgradation is a commendable step towards positioning India as a global manufacturing hub. The enhanced credit facilities and increased investment and turnover limits for MSMEs will provide significant support for businesses, helping them scale efficiently and foster innovation. These initiatives will undoubtedly boost India’s export potential and drive growth in sectors such as opto-semiconductors, 5G, and LED lighting solutions.
K V Srinivasan, Executive Director and CEO, Profectus Capital Private Limited
The budget has provided a significant boost to the MSME sector by significantly raising the thresholds for capital investment and turnover criteria for classification as Micro, Small, or Medium enterprises. Combined with the enhanced credit guarantee scheme, this move is expected to drive increased capital investment.
This would help MSMEs to modernize and expand their operations. Improved credit flow for startups is also a very welcome move. With the personal tax burden also coming down sharply, the increased consumption power should also help increase the overall demand for goods and services from MSMEs.
Sumit Bhatia, Co-founder, Aksum Trademark Pvt
The Government’s decision to increase investment and turnover limits for MSMEs by 2.5x and 2x, respectively, is a welcome move that will enable businesses to scale, innovate, and attract investments. Additionally, the enhanced credit guarantee cover under CGTMSE will provide easier access to formal credit, helping MSMEs grow and modernize.
At Aksum, we believe these reforms will strengthen India’s MSME sector, boost job creation, and drive economic growth. We look forward to leveraging these benefits to expand and innovate.
Jigar Kirtibhai Patel, Managing Director, G3+ Fashion
The Union Budget 2025’s forward-looking perspective to support Indian MSMEs is a commendable initiative as these businesses account for over 45% of the country’s total exports. The budget positions Indian MSMEs with enhanced scalability prospects, technological upgradation, capital accessibility, investment, and turnover growth — contributing towards their long-term success.
As MSMEs grow, they will also provide millions of new employment opportunities for Indian youth, directly impacting India’s per capita GDP going forward, helping to meet the country’s target to become a developed nation by 2047.
Mukul Goyal, Co-Founder, Stratefix Consulting
The Union Budget 2025 has rightly emphasized the pivotal role of MSMEs in India’s economic landscape. With over one crore registered MSMEs contributing approximately 36% to our manufacturing output and 45% to exports, their significance cannot be overstated. The government’s decision to enhance the investment and turnover thresholds for MSME classification is a commendable move. This adjustment will enable more enterprises to avail of MSME benefits, fostering growth and competitiveness.
Additionally, the increase in credit guarantee cover for micro-enterprises from ₹5 crore to ₹10 crore is a significant step. This initiative is expected to inject an additional ₹1.5 lakh crore in credit over the next five years, empowering small businesses to invest in innovation and expansion. However, while these measures are promising, it is crucial to address the persistent challenges that MSMEs face. Access to timely and affordable credit remains a hurdle for many small businesses. Streamlining the loan disbursement process and reducing bureaucratic red tape is essential to ensure that the intended benefits reach the grassroots level.
Furthermore, the emphasis on digitization and technology adoption is a welcome move. Encouraging MSMEs to integrate digital tools can enhance operational efficiency and open new market avenues. Providing incentives for technology adoption and digital literacy programs will be instrumental in this transition.
Maxson Lewis, Founder and CEO of Magenta Mobility
The Union Budget 2025 takes a big leap toward strengthening India’s economy while addressing the real challenges faced by SMEs and gig workers. MSMEs have long been the backbone of our EV industry, and this budget recognizes their role by offering targeted incentives, skill development programs, and infrastructure support—giving them the tools they need to scale and innovate.
At the same time, the expansion of the E-Shram scheme is a much-needed win for gig workers, ensuring they have access to social security, fair wages, and better upskilling opportunities. In today’s digital-driven world, these measures go a long way in creating a more inclusive workforce.
What’s particularly exciting is the boost for manufacturing—especially in electronics and EV battery production—along with fresh investment incentives for startups. By focusing on clean energy, self-reliance, and innovation, this budget isn’t just about numbers. It’s about empowering businesses, workers, and entrepreneurs to build a more sustainable and globally competitive India.
Ratish Pandey, Business Coach & Founder, Ethique Advisory
The Hon’ble Finance Minister’s budget brings much-needed attention to MSMEs, marking a step in the right direction for small and medium businesses.
A key highlight is the revision of limits for Micro, Small, and Medium Enterprises in terms of both sales and investments, creating new growth opportunities. Increased access to credit will strengthen MSMEs, helping them navigate market volatility more effectively. The introduction of term loans for well-performing exporters is another welcome move that will boost India’s export competitiveness.
Recognizing the shift towards a digital economy, the introduction of custom credit cards for MSMEs is a game-changing initiative that will streamline financial transactions and enhance digital adoption.
The continued focus on Alternative Investment Funds (AIFs) has yielded positive results, and this year’s ₹10,000 crore allocation for startups is a significant step toward supporting innovation and ensuring access to much-needed funding.
While these measures set a promising tone, the success of these initiatives will depend on their execution. Nonetheless, the budget reflects a strong intent to foster MSME growth and startup innovation, paving the way for a more resilient business ecosystem.