MSME Classification
MSMED Act, 2006 and the 2020 Revised Criteria
Government references to an "MSME boost" from a trade agreement only make sense against the statutory definition of an MSME. The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 created the first legal classification of these enterprises; the classification was substantially revised effective 1 July 2020 to use a composite investment-and-turnover criterion instead of the earlier investment-only test, and registration moved to the online Udyam Registration system (replacing Udyog Aadhaar).
- Micro: investment up to ₹1 crore and turnover up to ₹5 crore
- Small: investment up to ₹10 crore and turnover up to ₹50 crore
- Medium: investment up to ₹50 crore and turnover up to ₹250 crore
- An enterprise that crosses the ceiling in either investment or turnover moves to the next higher category
- Export turnover is excluded while computing annual turnover for classification purposes — a specific carve-out so that MSMEs are not pushed into a higher category, and consequently lose scheme benefits, purely because they export more
● Tracked since July 15, 2026 · last seen August 03, 2026 · updates as the daily brief publishes
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