The NITI Aayog on Monday released a report titled “Designing a Policy for Medium Enterprises”, emphasizing the strategic importance of medium-sized businesses in driving India’s economic growth. Despite accounting for just 0.3 percent of registered MSMEs, these enterprises contribute nearly 40 percent of the sector’s exports—highlighting their untapped potential and crucial role in fostering innovation, scaling operations, and enhancing global competitiveness.
The report lays out a six-point roadmap aimed at positioning medium enterprises as central drivers of India’s economic transformation under the government’s Viksit Bharat @2047 vision. It acknowledges that while MSMEs contribute about 29 percent to India’s GDP, 40 percent of exports, and employ over 60 percent of the workforce, the sector is heavily skewed towards micro enterprises. Of all registered MSMEs, 97 percent are micro, 2.7 percent are small, and just 0.3 percent are medium, revealing a significant structural imbalance.
The report identifies several challenges that hamper the growth of medium enterprises. These include restricted access to tailored financial products, limited adoption of advanced technologies, inadequate research and development support, a lack of sectoral testing infrastructure, and training programmes that are often misaligned with real enterprise needs. Such constraints hinder the ability of medium enterprises to expand, innovate, and compete at scale.
To overcome these hurdles, the report proposes a comprehensive set of reforms. It calls for the introduction of a turnover-linked working capital scheme, a ₹5 crore credit facility at market rates, and streamlined fund disbursals through retail banks, overseen by the Ministry of MSME. It also recommends upgrading existing Technology Centres into SME 4.0 Competence Centres tailored to specific sectors and regions, and establishing a dedicated R&D cell within the Ministry to support innovation through cluster-based projects of national relevance.
In addition, the report urges the development of sector-focused testing and certification facilities to ease compliance and improve product quality. It emphasizes aligning skill development efforts with the specific needs of enterprises, by integrating relevant modules into Entrepreneurship and Skill Development Programmes. To improve accessibility, a dedicated sub-portal on the Udyam platform is proposed, offering centralized access to government schemes, compliance resources, and AI-powered support tools.
The report calls for inclusive, collaborative policy design to unlock the full potential of medium enterprises. With the right support systems in place, medium enterprises can become powerful contributors to India’s innovation, job creation, and export performance, playing a central role in realizing the country’s development aspirations by 2047.