India’s economic narrative is often dominated by tales of large corporations and multinational ventures. However, the true heartbeat of the nation’s entrepreneurial spirit lies within the vast network of Micro, Small, and Medium Enterprises (MSMEs). These businesses, often family-run or driven by individual passion, are the backbone of India’s small business ecosystem, providing vital support and driving local economies.

While the sheer statistical significance of MSMEs is undeniable – contributing substantially to GDP, exports, and employment – their impact extends far beyond mere figures. They are the incubators of innovation, the guardians of traditional crafts, and the providers of essential goods and services to communities across the country.   

Our newsletter is an attemppt to provide brief about the developments in MSME Sector on weekly basis. 

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  • “MSME industry bodies urge RBI to tweak norms for ecommerce exports” 

Micro, Small and Medium Enterprise (MSME) industry bodies are intensifying their calls for the Reserve Bank of India (RBI) to overhaul existing regulations that they deem restrictive and detrimental to the burgeoning e-commerce export sector. The current framework, they argue, is riddled with complexities, leading to increased compliance costs, logistical hurdles, and significant delays, particularly for smaller exporters.

A primary point of contention lies in the manual reconciliation of shipping bills with inward remittances (IRMs). Industry representatives highlight the sheer impracticality of this process, especially given the high volume of transactions characteristic of e-commerce. They propose the implementation of an AI-powered system within the Export Data Processing and Monitoring System (EDPMS) to automate this matching process, drastically reducing manual intervention and potential errors.

Micro, small and medium enterprises (MSME) industry bodies have requested the Reserve Bank of India (RBI) for certain changes in the regulations for ecommerce exports. These MSME bodies met the central bank in Ahmedabad, Gujarat, last week.

“The industry bodies told the RBI that the current system of manually matching shipping bills with inward remittances (IRMs) is impractical for high-volume ecommerce exports,” an industry source privy to the development said.

The source noted that they have requested the RBI to develop an automated reconciliation system within the Export Data Processing and Monitoring System (EDPMS), leveraging artificial intelligence (AI) algorithms, to

  • MSME SCHEMES:

The government has introduced many schemes to encourage the micro and small industries. Through many schemes, the Central government is boosting the credit availability for the MSMEs. MSME (Micro, Small and Medium Enterprises) schemes are initiatives launched by the Government of India to support and promote the growth and development of small businesses in the country.

  • “SBI PLANS TO ENHANCE LIMIT UNDER INSTANT LOAN SCHEME FOR MSME SECTOR”

To ensure easy and adequate credit availability to the MSME sector, the State Bank of India (SBI) is planning to enhance the threshold under the instant loan scheme from the existing Rs 5 crore.

MSME Sahaj – End to End Digital Invoice Financing’, provides solutions ranging from applying for the loan, documentation and disbursement of the sanctioned loan within 15 minutes, without any manual intervention.

We have, last year, introduced a business rule engine based, data based assessment of the credit limits up to Rs 5 core. Anybody walking into our MSME branch has to give only their PAN and approval for sourcing GST data, we can give approval in 15-45 minutes,” SBI Chairman C S Setty told PTI in an interview. 

Simplification of the MSME credit is something that the bank is emphasising on and making lending cash flow based backed by the CGTMSE guarantee, he said. This reduces the need for collateral, which would enable a lot of people to come into the formal MSME borrowing system, he said.

As far as network expansion is concerned, Setty said SBI is planning to open 600 branches across the country in the current financial year. SBI has a network of 22,542 branches across the country as of March 2024.

We serve about 50 crore customers and we take pride in saying that we are the banker to every Indian, and, more importantly, to every Indian family,” he said.

He also said it will be his endeavour to transform SBI into the best and the most valued bank not only from a shareholder point of view but for every stakeholder who deals with the lender.

It could be my customers, it could be our shareholders, it could be the larger ecosystem — the society, the institutional framework — all the stakeholders should be saying that this is the best bank to deal with,” he added.

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Trade Receivables electronic Discounting System (TReDS) is an online electronic platform and an institutional mechanism for factoring of trade receivables of MSME sellers. It enables discounting of invoices through an auction mechanism to ensure prompt realization of trade receivables. Businesses can leverage invoice discounting to quickly access funds tied up in outstanding invoices, effectively utilizing the value of their sales ledger. This practice, often referred to as bill discounting, has been refined over several decades.

Launched by the Reserve Bank of India (RBI) in 2018, TReDS serves as an electronic platform that allows MSMEs to quickly access financing with lower annual interest rates tailored for small businesses. 

  • How govt is addressing payment delays for India’s MSMEs, according to Economic Survey 2025

To address the long-standing issue of payment delays, the government has strengthened the TReDS platform, regulated by the Reserve Bank of India (RBI). This system enables MSMEs to receive timely payments from Public Sector Undertakings (PSUs) such as BHEL, NTPC, ONGC, BPCL, and IOCL, as well as large corporates.

India’s Micro, Small, and Medium Enterprises (MSMEs) continue to drive economic growth, but delayed payments remain a persistent challenge. The Economic Survey 2025 highlights government efforts to ease liquidity constraints and ensure timely payments through initiatives like the Trade Receivables Discounting System (TReDS) and the MSME Samadhaan portal.

To address the long-standing issue of payment delays, the government has strengthened the TReDS platform, regulated by the Reserve Bank of India (RBI). This system enables MSMEs to receive timely payments from Public Sector Undertakings (PSUs) such as BHEL, NTPC, ONGC, BPCL, and IOCL, as well as large corporates.

The MSME Samadhaan portal has also been instrumental in resolving payment disputes. As of the latest data, over 2.2 lakh complaints have been lodged regarding pending payments. While 45,952 cases have been resolved, nearly 39,893 remain under consideration. Additionally, the CHAMPIONS portal, available in 11 regional languages, is providing real-time grievance redressal to small businesses.

Meanwhile, the Micro and Small Enterprises-Cluster Development Programme (MSE-CDP) is helping businesses upgrade technology and improve efficiency. According to the survey, MSMEs benefiting from the programme have reported a 10-15% increase in productivity and a turnover boost of 20-30%. Source: Click Here

  • MSME Corporate News: 
  • TN Budget 2025: Rs 1,918 crore allocated for MSME growth; nine new industrial estates announced

With a strong focus on setting up new industrial estates, promoting startups and supporting artisans, the Tamil Nadu government has allocated Rs 1,918 crore for the Micro, Small, and Medium Enterprises (MSME) Department.

Finance Minister Thangam Thennarasu announced that the Tamil Nadu Small Industries Development Corporation (SIDCO) will establish nine new industrial estates across the state at an investment of Rs 366 crore, and these are expected to generate 17,500 employment opportunities.

The new estates will be set up in Thirumudivakkam in Kancheepuram district, Saram and Nayanur in the Villupuram district, Nagampalli in Karur district, Sooriyur in Tiruchy district, Karuttapuliyampatti in Madurai district, Thanichyam in Ramanathapuram district, Naduvur in Thanjavur district, and Narasinghanallur in Tirunelveli district, the minister said.

In FY 2025-26, banks will extend loans worth Rs 2.5 lakh crore to 10 lakh MSMEs in Tamil Nadu. With over 32 lakh registered MSMEs, the state ranks third in India in terms of enterprise numbers. The government continues to support startups through the Tamil Nadu Startup Seed Fund, allocating Rs 20 crore for the initiative under the Tamil Nadu Startup and Innovation Mission (TANSIM), he added. (To read more – Click Here)

  • MSMEs call for reduced data compliance as India’s data protection regime takes shape

The MSME industry body India SME Forum on Wednesday called for reduced data compliance for micro, small and medium enterprises that rely on third-party advertising and data analytics as the country’s data protection laws take shape. 

After startups’ resistance to the high cost of compliance with data protection laws, it’s the turn of small and medium businesses to raise concerns about the restrictive impact of these laws.

India SME Forum surveyed over a thousand small and micro firms and concluded that heightened compliance related to consumer data would be detrimental to the sector, which relies heavily on digital tools for business expansion, as per a press release on Wednesday.

Based on the survey’s findings, the forum called for reducing the compliance burden on small businesses that rely on third-party advertising and data analytics, ensuring the protection and availability of targeted marketing solutions for MSMEs in India, and adopting a flexible approach for MSMEs to facilitate responsible data use without excessive regulatory overheads, the press release said.

India SME Forum’s survey followed the notification of the draft Digital Personal Data Protection Rules and the draft Digital Competition Bill in 2024. “MSMEs fear that overly restrictive policies may limit their ability to leverage digital tools for marketing, customer engagement, and business growth,” the industry body said in the press release.

More likely to be profitable

The survey also found that firms that used digital tools were more likely to be profitable than firms that avoided such tools. One of the survey findings was that 78% of high-adoption MSMEs expect revenue growth in 2025, compared to 70% of lower adopters.

Digital platforms have become a critical solution for low customer attraction and retention in MSMEs, as per the survey. Also, 94% of MSMEs that invest in digital advertising consider it essential for acquiring and retaining customers. Read more – Click Here

  • MSMEs helped propel India out of ‘Fragile Five’ status

Government initiatives like financial reforms and ease of doing business have aided MSMEs in joining global supply chains, contributing to India’s rise to a top-five global economy. Anurag Thakur highlighted the role of startups and the capital market’s unique position in funding entrepreneurial ventures.

Concerted efforts by the government to support MSMEs through financial reforms, ease of doing business initiatives and credit access programmes have helped integrate them into global supply chains, said MP and former union minister Anurag Thakur.

This, in turn, propelled India from being a part of the ‘Fragile Five’ to one of the world’s top five economies, he added.

Crediting the youth for building enterprises-160,000 startups and 117 unicorns-that compete on the global stage, Thakur said, “Over the past decade, India has risen from the ‘Fragile Five’ to one of the world’s top five economies; and in the next three years, we are set to become the third-largest economy.” (To read more – Click Here)

He has contributed in ICAI, ICSI and MCCI and other various Newsletters. He is also a speaker at various platforms including seminars / webinars.