MSME (Micro, Small and Medium Enterprises) is a classification under the MSMED Act 2006 that recognizes the importance of small businesses to the Indian economy. Udyam Registration is the official government portal registration that formally classifies your business as Micro, Small or Medium, replacing the older Udyog Aadhar system from 2020.
What is MSME and Udyam Registration?
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Learn About MSME RegistrationMSME Classification Criteria 2026
Classification is based on BOTH investment in plant/machinery AND annual turnover:
- Micro Enterprise: Investment < ₹1 crore AND turnover < ₹5 crore
- Small Enterprise: Investment < ₹10 crore AND turnover < ₹50 crore
- Medium Enterprise: Investment < ₹50 crore AND turnover < ₹250 crore
If EITHER limit is exceeded, the classification upgrades. However, downgrading requires 2 consecutive years below the lower threshold.
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