Emphasising the significance of micro, small, and medium enterprises (MSMEs) as the backbone of India’s industrial economy, the Economic Survey 2025-26 stated that they account for approximately 35.4% of manufacturing, around 48.58% of exports, and 31.1% of GDP in the country. “With over 74.7 million enterprises employing over 328.2 million people, the sector holds its position as the second-largest employer after agriculture. Globally, MSMEs make up about 90% of businesses and are responsible for over 50% of the total global employment,” the Survey said.
It noted that the MSME sector’s role is critical in enabling effective supply chain participation, fostering local value addition, and supporting inclusive regional growth, especially since India’s manufacturing sector is positioned for greater global integration.
It further said that India accounted for an estimated 2.9% of the global manufacturing GVA and 1.8% of global merchandise exports in 2024, indicating considerable potential for growth in global manufacturing footprint. “The limited share can be attributed to relatively low participation in GVC trade, particularly on the backward-linked side, where firms import intermediates and components to assemble for export,” it said.
The Survey observed that for a labour-rich economy, export-oriented GVC participation can be a powerful mechanism for employment generation in higher-productivity manufacturing. “Going forward, continued calibration of tariffs on intermediates and capital goods, especially in high-growth sectors, can enhance cost competitiveness, deepen assembly and component ecosystems, and support India’s emergence as a preferred global production base,” it said.
It noted that the MSME sector’s role is critical in enabling effective supply chain participation, fostering local value addition, and supporting inclusive regional growth, especially since India’s manufacturing sector is positioned for greater global integration.
It further said that India accounted for an estimated 2.9% of the global manufacturing GVA and 1.8% of global merchandise exports in 2024, indicating considerable potential for growth in global manufacturing footprint. “The limited share can be attributed to relatively low participation in GVC trade, particularly on the backward-linked side, where firms import intermediates and components to assemble for export,” it said.
The Survey observed that for a labour-rich economy, export-oriented GVC participation can be a powerful mechanism for employment generation in higher-productivity manufacturing. “Going forward, continued calibration of tariffs on intermediates and capital goods, especially in high-growth sectors, can enhance cost competitiveness, deepen assembly and component ecosystems, and support India’s emergence as a preferred global production base,” it said.
