India Has Revised MSME Classification Criteria: New Investment and Turnover Limits Effective April 2025

On March 21, 2025, the Ministry of Micro, Small, and Medium Enterprises (MSME) of the Government of India, issued a notification announcing amendments to an earlier notification published on June 26, 2020, under the Micro, Small, and Medium Enterprises Development Act, 2006.  

The updated guidelines, which came into force on April 1, 2025, introduce significant changes to the investment and turnover criteria for classifying Micro, Small and Medium Enterprises (MSMEs).  

Key Changes:  

1. Increased Threshold for Classification:  

• The maximum investment limits for different categories have been substantially increased:  

• Micro Enterprises: The investment limit has been raised from ₹1 crore to ₹2.5 crore.  

• Small Enterprises: The investment limit has been raised from ₹10 crore to ₹25 crore.  

• Medium Enterprises: The investment limit has been revised from ₹50 crore to ₹125 crore.  

2. Turnover Limits Revised:  

• The turnover limits for these enterprises have also been adjusted:  

• Micro Enterprises: From ₹5 crore to ₹10 crore.  

• Small Enterprises: From ₹50 crore to ₹100 crore.  

• Medium Enterprises: From ₹250 crore to ₹500 crore.  

3. Overall Growth Potential  

• The updated notification is expected to provide MSMEs with greater opportunities to expand, access more benefits and receive more government support. This will boost the overall growth of the sector.  

Impact of MSME Sector Growth  

The new thresholds align with the evolving economic landscape and the government's commitment to strengthening the MSME sector. This change is anticipated to allow more businesses to qualify as MSMEs, thereby increasing their access to various schemes and financial support.  

Implementation and Further Information  

The notification follows the recommendations of the Advisory Committee and took effect on April 1, 2025. For further details, the full notification is available here.