Firms up to Rs 500 crore are now medium; MSMEs get a new definition

Union Budget 2025: Union Finance Minister Nirmala Sitharaman on Saturday announced new classification criteria for micro, small, and medium enterprises (MSMEs). The investment and turnover limits for the classification of all MSMEs will be increased to 2.5 times and 2 times, respectively.

According to the Budget 2025, MSMEs with investments up to Rs 2.5 crore will now be classified as microenterprises, an increase from the previous threshold of Rs 1 crore. Firms with investments up to Rs 25 crore will be known as small enterprises, up from Rs 10 crore. Additionally, MSMEs with investments up to Rs 125 crore will be recognised as medium enterprises, a rise from the earlier limit of Rs 50 crore.

The revised turnover criteria for MSMEs are as follows:


Micro Enterprises: The turnover limit has been revised from Rs 5 crore to Rs 10 crore.

Small Enterprises: The turnover limit has been increased from Rs 50 crore to Rs 100 crore.

Medium Enterprises: The turnover limit has been raised from Rs 250 crore to Rs 500 crore.

“Currently, over 1 crore registered MSMEs, employing 7.5 crore people across the country and generating 36% of our manufacturing, have come together to position India as a global manufacturing hub. With their quality products, these MSMEs are responsible for 45 per cent of our exports. To help them achieve higher efficiencies of scale, technological upgradation, and better access to capital, the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times, respectively. This will give them the confidence to grow and generate employment for our youth,” said Sitharaman during her Budget speech.