MSME Classification & Registration in India: Everything You Need to Know

MSMEs play a crucial role in India’s economy, driving employment and growth. To support them, the government has set classification criteria and a simple registration process. Over time, these classifications have evolved to include both investment and turnover limits, ensuring businesses get the right benefits. This blog explains MSME classification and registration in India, helping entrepreneurs understand the process easily.

MSME Classification

The MSME Classification is based on investment in plant and machinery or equipment and turnover of the enterprise. 

In the Union Budget 2025, the Government of India introduced a major revision to the MSME classification criteria. The investment limits have been raised by 2.5 times, while turnover limits have been doubled. This adjustment is designed to enable MSMEs to expand without forfeiting essential benefits and incentives, fostering economic growth and job creation.

Below is a brief overview of the updated criteria as per the Union Budget 2025:

MSME Registration

MSMEs are required to get themselves registered on the Udyam Registration Portal. It is a fully online process where you visit the official portal, enter your Aadhaar details, fill out the application, and receive a Udyam Registration Certificate after verification.

Following is the detailed process:

• Visit the official Udyam Registration portal at udyamregistration.gov.in.
• New entrepreneurs and those with EM-II registration should click on the homepage button labeled “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II.”
• On the next page, enter the Aadhaar number and entrepreneur’s name, then click “Validate and Generate OTP”. The PAN Verification page will open once the OTP is received and entered.
• Select the Type of Organisation, enter the PAN number, and click “Validate PAN”. The system will retrieve PAN details from government databases for verification.
• After PAN verification, the Udyam Registration form will be displayed. Entrepreneurs must fill in their personal and enterprise details.
• Provide investment and turnover details, select the declaration, and click “Submit and Get Final OTP”. After entering the OTP and submitting the form, the Udyam Registration Certificate will be sent via email. Entrepreneurs can also check their MSME registration status on the portal.

Conclusion

MSMEs are a vital part of India's economic growth, and the government has continuously refined its classification and registration process to provide better support. The latest revisions in the Union Budget 2025 have expanded the investment and turnover limits, allowing businesses to scale without losing key benefits. The simplified Udyam registration process ensures that entrepreneurs can easily register and access various government incentives. By understanding these updates, MSMEs can leverage opportunities for growth, financial assistance, and market expansion, ultimately strengthening the overall economy.