From MSMEs to traditional industries, Rajasthan’s enterprises seek stronger ecosystem to scale

Rajasthan, a diversified economy with a strong presence in agriculture, mining, and tourism sectors, has built an expansive policy framework to attract investment and support industries, MSMEs (micro, small, and medium enterprises), and start-ups, but infrastructure gaps, uneven implementation, limited access to finance, and weak institutional coordination continue to hold back the state’s industrial potential, stakeholders say.

P.R. Sharma, Director at the Global Trade Promotion Corporation (GTPC) and former Joint Director of Industries & Commerce for the Government of Rajasthan, says the state has made considerable progress in creating an industry-friendly policy environment.

“Rajasthan has 18 sector-specific policies, which is something you do not find in many other states. These are exclusive policies, and they clearly reflect the state government’s intention to promote industry,” Sharma says.


The state has also undertaken reforms in areas such as land allotment and ease of doing business and has performed strongly on national logistics parameters. “On policy, Rajasthan is very supportive,” Sharma says.

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However, the gap between policy intent and implementation, as per stakeholders, is a major concern.

One of Rajasthan’s biggest untapped opportunities lies in its location along two major national infrastructure projects—the Delhi-Mumbai Industrial Corridor (DMIC) and the Dedicated Freight Corridor (DFC), they say.

Around 39% of the area covered by the DMIC falls in Rajasthan, while roughly 40% of the DFC passes through the state, according to Sharma.

While infrastructure gives Rajasthan a significant potential advantage in attracting manufacturing, logistics, and export-oriented industries, Sharma believes the state has not been able to fully capitalise on it.

“The DMIC is a very good scheme for developing industrial corridors across the country, but we have not been able to fully exploit its potential,” he says.

According to Sharma, junctions along the DFC could have been developed into industrial development centres and investment hubs, creating clusters around logistics infrastructure.

“We should have developed the junctions along the corridor as development centres and investment hubs, but we have not been able to do that to the extent we should have. We are still behind on this front,” he said.

For businesses, the problem extends beyond the availability of large infrastructure projects. Better coordination between government departments is also needed, he adds, so that businesses can actually access the benefits announced under various schemes and policies.

Export ambitions need stronger ecosystem

Exports represent another major opportunity for Rajasthan, but stakeholders believe the state needs to strengthen the institutional ecosystem supporting exporters.

Rajasthan’s exports have doubled over the last three years, but stakeholders argue that the state will need stronger institutional infrastructure and greater field-level outreach if it is to contribute more significantly to India’s broader export ambitions.

The Rajasthan government has recently doubled the grant for technological upgradation under its export policy to boost competitiveness and support exporters adopting modern technology.

Government programmes such as the Raising and Accelerating MSME Performance (RAMP) programme also need greater assessment of their impact at the grassroots level, says Sharma.

Land access remains another issue

“Land allotment is another area where Rajasthan has undertaken significant reforms, but these reforms are still not fully reaching MSMEs,” he says.

Given the state’s large land availability, the process of direct allotment as well as allotment through the Rajasthan State Industrial Development and Investment Corporation (RIICO) needs to become more efficient, particularly for smaller businesses.

Credit remains a key pain point

For MSMEs in the state, access to finance continues to be one of the biggest constraints, particularly for export-oriented businesses.

Stakeholders call for better data management and stronger engagement between banks and industry, including greater banking exposure for exporters.

“Bankers at the block, district, and state levels need to pay greater attention to the credit requirements of exporters. Export credit, especially, requires significant focus,” Sharma says.

Rajasthan already offers MSMEs several state-specific credit support measures, including interest subvention schemes. In some cases, interest support can be as high as 5-7%, with certain schemes offering support of up to 8%. Yet, the existence of a scheme does not necessarily translate into easy access to finance. “These are very supportive measures, but the actual implementation has many issues. That is the practical problem we need to address,” Sharma says.

MSME registrations fall even as employment rises

The latest MSME registration data presents a mixed picture of Rajasthan’s enterprise ecosystem. MSME registrations in the state fell 16% to 1.04 million in 2025-26 from 1.25 million in 2024-25, a decline of more than 200,000 registrations in a single year. The state had recorded 1.13 million registrations in 2023-24.

At the same time, employment reported by MSMEs registered on the Udyam Registration Portal (URP) and Udyam Assist Platform (UAP) increased to 5.22 million in 2025-26 from 4.45 million in 2024-25.

Traditional industries face a tougher road

The challenges are particularly visible in Rajasthan’s traditional industries, which remain heavily dependent on skilled labour, local supply chains, and global demand.

Mahavir Pratap Sharma, Founder & CEO of Oscar Exports, says the carpet and handicrafts industry is facing pressure from rising costs, geopolitical uncertainty, labour shortages and weaker demand for luxury products.

“We are losing skilled labour. We are dealing with unpredictability that the world has to bring—the wars and the rising cost of imported wool because of inflation across the world going through the roof,” he adds.

The US accounts for around 60% of the sector’s market, according to Sharma of Oscar Exports. Weakness in the American economy, particularly in the luxury segment, therefore, has a direct impact on Indian exporters.

To survive the difficult market conditions, companies have increasingly moved towards lower-cost products and, in some cases, reduced the quality of raw materials, adds Sharma of Oscar Exports.

“We have had to resort to low-end, cost-effective floor coverings. We have had to resort to cutting down on the quality of raw material. Multiple things are being done to cope with the situation,” says Sharma of Oscar Exports.

Sharma of Oscar Exports calls for a dedicated textile park for the carpet industry in Rajasthan, with common infrastructure such as effluent treatment plants, laboratories, and research centres.

While similar facilities exist for apparel, garments and printing, the carpet sector lacks dedicated common infrastructure, he says.

Affordable housing for workers is another requirement, particularly as the industry struggles to retain labour. Support for the wool industry in Bikaner and sheep breeding could also help strengthen the raw-material ecosystem while generating rural employment, he adds.

Jaipur’s start-up story offers a different opportunity

While traditional industries are grappling with structural pressures, Jaipur is witnessing growing momentum in start-ups and new-age businesses. Astha Katta Sirohiya, Co-Founder of Shyle, described a “brilliant wave” emerging in Jaipur’s start-up ecosystem. “We have been working for over seven years and can see that wave happening in Jaipur,” she says.

Jaipur has historically been a strong trading and business centre, but the nature of entrepreneurship is changing, with more businesses evolving into formal companies and start-ups.

The city’s strongest advantage, Sirohiya says, remains its manufacturing and craftsmanship ecosystem.

From apparel and jewellery to prints, gemstones and handcrafted products, Jaipur has a deep network of suppliers and skilled artisans. “Whenever there is handwork, Jaipur’s artisans are extremely strong,” she says.

The ecosystem around Bagru printing, jewellery, and crafts such as Polki, Kundan and Meenakari represents skills developed over generations. However, technology talent remains a weakness. Sirohiya says companies often find it easier to hire technology professionals in Bengaluru and Gurgaon. As start-ups grow, some are consequently forced to establish offices in larger technology hubs. Remote working has helped reduce this disadvantage, but the shortage of technology talent remains a constraint for Jaipur’s ability to build large technology-led companies.

Education could unlock next growth-phase

A stronger higher-education ecosystem could help address the talent gap. Sirohiya points to government-backed incubation initiatives at institutions, such as JECRC University, as positive developments, but argues that Jaipur needs more leading educational institutions to deepen its talent pool.

The absence of institutions such as IIT or IIM in the city, she said, remains a limitation for long-term ecosystem development.

“If more leading educational institutions come to Jaipur, it will be a win-win situation for the city as well as its businesses. It can strengthen the talent pool, create more opportunities for students and businesses, and further accelerate Jaipur's startup and industrial ecosystem,” she says.

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