On May 2, 2025, NITI Aayog, in collaboration with the Institute for Competitiveness, released a comprehensive report titled "Enhancing MSMEs Competitiveness in India". The report outlines systemic reforms aimed at unlocking the potential of India's Micro, Small, and Medium Enterprises (MSMEs) through targeted interventions in financing, skilling, innovation, and market access.

Key Highlights:

• Improved Access to Formal Credit: Between 2020 and 2024, access to formal credit for Micro and Small Enterprises increased from 14% to 20%, and for Medium Enterprises from 4% to 9%. Despite this progress, only 19% of total MSME credit demand was met in FY21, leaving an estimated credit gap of Rs. 80 lakh crore. 
• Employment and Economic Contribution: India hosts over 5.93 crore registered MSMEs, employing more than 25 crore individuals, which constitutes around 40% of the nation's workforce. In the fiscal year 2021-22, MSMEs contributed 36.2% to India's total manufacturing output. 
• Recommendations for Enhancing Competitiveness:
  • Financial Reforms: Revamping the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to facilitate scalable and inclusive financing solutions.
  • Skill Development: Implementing targeted skilling programs to enhance workforce capabilities within the MSME sector.
  • Innovation and Market Access: Promoting digital marketing training, establishing partnerships with logistics providers, and creating platforms for direct market linkages, particularly in high-growth regions like India's northeastern and eastern belts. 
• Sectoral Focus: The report emphasizes the need for tailored strategies across key sectors, including textiles, chemicals, automotive, and food processing, to address specific challenges and opportunities within each domain. 

The report serves as a strategic roadmap for policymakers, industry stakeholders, and financial institutions to collaboratively enhance the global competitiveness of India's MSMEs, thereby fostering sustainable economic growth and employment generation.