Revised MSME Definition

Last updated by Jai on July 25, 2021

Can Trading business/ Trader be classified as MSME?

Retail Trade and Wholesale trade are now treated as MSME as per new definition of MSME. Traders can now apply for Udyam Registration Portal

Ministry of Micro, Small and Medium Enterprises vide Office Memorandum (OM) No. 5/2(2)/2021-E/P & G/Policy dated July 2, 2021, has decided to include Retail and Wholesale trade as MSMEs for the limited purpose of Priority Sector Lending and they would be allowed to be registered on Udyam Registration Portal.

RBI has issued Circular in this regard on 7th July 2021.

Central Government vide notification dated 1st June 2020 changed the definition of Micro, Small and Medium Enterprises (MSME).

According to revised MSME definition following is the investment and turnover criteria for classification into Micro, Small or Medium Enterprises:

ClassificationInvestment in Plant & Machinery or EquipmentAnnual Turnover
Micro EnterpriseUpto Rs. 1 CroreUpto Rs.5 Crore
Small EnterpriseUpto Rs.10 CroreUpto Rs.50 Crore
Medium EnterpriseUpto Rs.50 CroreRs.250 Crore
Revised MSME Definition

Turnover exclude Export Turnover.

The revised MSME classification norms will be effective from 1st July 2020.

Earlier there was no turnover criteria for classification under MSME and investment in plant & machinery or Equipment was as under:

(Investment in P&M)
(Investment in Equipment)
MicroUpto Rs.25 lacsUpto Rs.10 lacs
SmallUpto Rs.5 CroresUpto Rs.2 Crores
MediaumUpto Rs.10 CroresUpto Rs.5 Crores
Old MSME definition
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