The chamber noted that the MSME sector contributed 30% to India’s manufacturing output in 2025 and has emerged as the second-largest employer after agriculture. The sector’s role in global trade has also strengthened, with exports accounting for 43.59% in 2022-23, 45.73% in 2023-24 and 45.79% in 2024-25 (up to June 2025).
PHDCCI said these trends highlight the increasing integration of MSMEs into global trade and value chains, underlining the need for targeted policy interventions.
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Formalisation gathers pace
According to Ranjeet Mehta, CEO & Secretary General, PHDCCI, more than 7.30 crore enterprises have registered on the Udyam Registration Portal and the Udyam Assist Platform (UAP) between July 2020 and December 2025, bringing a large number of MSMEs into the organised sector. This formalisation, it said, enables more structured and targeted implementation of government schemes and policies.
Among its key Budget proposals, PHDCCI called for the reintroduction of an interest subvention scheme for MSMEs, proposing a 2% interest subsidy on new and incremental loans from banks and non-banking financial companies (NBFCs). The chamber said the cost of credit for MSMEs remains relatively high.
Revision of MUDRA loan limits
PHDCCI also recommended revising loan ceilings under the Pradhan Mantri MUDRA Yojana, citing a rise in project costs since the scheme’s launch in 2015. It proposed increasing the Shishu loan limit from ₹50,000 to ₹1 lakh, the Kishore limit from ₹5 lakh to ₹10 lakh, and the Tarun and Tarun Plus category limit to ₹20 lakh.
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To support MSME exporters amid rising global tariff pressures, the chamber proposed reintroducing the Interest Equalisation Scheme on pre- and post-shipment export credit. It also suggested extending eligibility to service exporters, in addition to manufacturing exporters.
Equity support and payment protection
PHDCCI further called for equity infusion through the Fund of Funds, particularly for start-ups, to meet seed capital requirements. It also recommended expanding the scope of MSME Facilitation Councils under the MSME Development Act, 2006, to allow medium enterprises to seek relief in cases of delayed payments.
Technology upgrade and compliance relief
To promote the adoption of modern and eco-friendly technologies, the chamber proposed enhancing the Credit-Linked Capital Subsidy Scheme by raising the investment ceiling to ₹2 crore from the current ₹1 crore.
In addition, it sought amendments to Section 44AB of the Income Tax Act to exempt all micro enterprises with turnover up to ₹10 crore from mandatory tax audits, irrespective of profit margins, citing high compliance costs.
PHDCCI said its Union Budget 2026–27 recommendations focus on improving access to finance, reducing regulatory burden and strengthening institutional mechanisms for MSMEs.
