On May 26, 2025, NITI Aayog released a transformative report titled “Designing a Policy for Medium Enterprises”, outlining a strategic roadmap to position medium enterprises as the backbone of India’s economic growth and the drivers of Viksit Bharat @2047. Launched by Shri Suman Bery, Vice Chairman, NITI Aayog, in the presence of Dr. V.K. Saraswat and Dr. Arvind Virmani, Members of NITI Aayog, the report highlights the critical role of medium enterprises in achieving India’s vision of self-reliance and global competitiveness.
The Role of MSMEs in India’s Economy
The Micro, Small, and Medium Enterprises (MSME) sector is a cornerstone of India’s economy, contributing approximately 29% to the GDP, accounting for 40% of exports, and employing over 60% of the workforce. However, the sector’s composition reveals a structural imbalance: 97% of registered MSMEs are micro enterprises, 2.7% are small, and only 0.3% are medium enterprises. Despite their small share, medium enterprises contribute nearly 40% of MSME exports, showcasing their immense potential as scalable, innovation-led units critical to India’s economic transformation.
Challenges Faced by Medium Enterprises
Medium enterprises face significant hurdles that limit their growth and innovation. The report identifies key challenges, including:- Constrained access to tailored financial products, which restricts their ability to scale operations.
- Limited adoption of advanced technologies, hindering their integration into Industry 4.0.
- Inadequate R&D support, which limits innovation and competitiveness.
- Lack of sectoral testing infrastructure, complicating compliance and quality assurance.
- Mismatch between training programs and enterprise needs, leading to skill gaps.
Key Policy Recommendations
The report proposes a comprehensive policy framework with six priority areas to empower medium enterprises:- Tailored Financial Solutions: Introduce a working capital financing scheme linked to enterprise turnover, a ₹5 crore credit card facility at market rates, and expedited fund disbursal through retail banks, overseen by the Ministry of MSME.
- Technology Integration and Industry 4.0: Upgrade existing Technology Centers into India SME 4.0 Competence Centers to promote the adoption of advanced technologies tailored to regional and sectoral needs.
- R&D Promotion Mechanism: Establish a dedicated R&D cell within the Ministry of MSME, leveraging the Self-Reliant India Fund for cluster-based projects of national significance.
- Cluster-Based Testing Infrastructure: Develop sector-focused testing and certification facilities to enhance product quality and ease compliance.
- Custom Skill Development: Align skilling programs with enterprise-specific needs by region and sector, integrating medium enterprise-centric modules into the Entrepreneurship and Skill Development Programmes (ESDP).
- Centralized Digital Portal: Create a dedicated sub-portal within the Udyam platform featuring scheme discovery tools, compliance support, and AI-based assistance for resource navigation.
The report emphasizes that medium enterprises are the future large enterprises and key drivers of India’s vision for Viksit Bharat @2047. By addressing structural challenges and promoting inclusive policy design and collaborative governance, medium enterprises can lead in innovation, employment, and export growth. This transformation will strengthen India’s position in global industrial competitiveness and contribute to economic self-reliance.
Why It Matters
The focus on medium enterprises aligns with India’s broader economic goals of fostering innovation, creating jobs, and boosting exports. By leveraging tailored financial tools, advanced technologies, and skill development, medium enterprises can transition into large-scale enterprises, driving sustainable economic growth. The report’s emphasis on digital integration and cluster-based infrastructure ensures that these enterprises remain competitive in a rapidly evolving global market.
| Aspect | Details |
|---|---|
| Event | Release of NITI Aayog’s Report: “Designing a Policy for Medium Enterprises” |
| Date | May 26, 2025 |
| Key Figures | Shri Suman Bery, Dr. V.K. Saraswat, Dr. Arvind Virmani |
| MSME Contribution | 29% to GDP, 40% to exports, employs over 60% of workforce |
| Medium Enterprises | 0.3% of MSMEs, contribute 40% of MSME exports |
| Policy Focus Areas | Financial solutions, Technology integration, R&D, Testing infrastructure, Skill development, Digital portal |
| Vision | Viksit Bharat @2047 |